You have to spend money to make money. It’s a phrase most people know well, especially when you own or run a business. Of course, a business shouldn’t use capital irresponsibly and spend without consideration, but establishing and growing a business does require money for inventory, marketing and advertising, staff costs, setting up internal systems and investing in growth. And when a business can demonstrate its potential future strength, it can access outside finance which may provide more capital than the business might have otherwise had to invest in growth.
For many businesses, however, accessing capital can be difficult. Many of the traditional lenders require a business to satisfy criteria that new and smaller businesses can find difficult to meet. Further, those business owners who don’t have collateral, such as residential property, to secure a business loan may experience further difficulties accessing capital. Non-bank lenders have emerged in recent years to address these challenges.
In this article, we outline the benefits of financing your business growth through non-bank lending channels.
Common drivers to access finance
A business may need to access finance for several reasons. For example, a Business Characteristics Survey from the Australian Bureau of Statistics found that 41 per cent of businesses needed finance to strengthen their cash flow while a further 30 per cent of companies were in need of capital to upgrade machinery and equipment.
In traditional finance channels, specific balance sheet requirements would need to be met in order to access capital. Even if a business has a strong pipeline of orders and a relatively small amount of assets and liabilities, it won’t satisfy a bank’s requirements. While a business may look to other traditional finance channels such as internal funds and equity finance, it can put a strain on a business owner’s personal assets while equity finance hands over valuable control to other parties. Alternative finance solutions provide a range of benefits while addressing the challenges inherent in traditional finance channels.
On-demand channels help businesses to survive and thrive
There is a range of on-demand finance channels available to businesses today. These channels are game-changers for business owners as they allow the business to leverage current assets and sales pipelines to access capital.
For a wholesaler or supplier, on-demand business finance enables you to get paid what you are owed, and on time. Essentially it allows your business to turn accounts receivables into cash faster.
- Access to cash whenever it’s needed.
- Forecast cash flows more accurately by having more certainty over money coming into the business.
- Limit credit exposure, get paid on time and drive improved cash flow.
- Make smarter investments in R&D and business growth.
As a retailer or buyer, business finance delivers a cash flow advantage to pay supplier invoices on time, but gives you the flexibility to spread the repayments over instalments.
- Forecast cash flows more accurately.
- Strengthen relationships with your suppliers.
- Boost your purchasing power with quick access to working capital.
- Have money available to invest more in R&D and business growth.
Access the capital to grow your business with Spenda
Spenda’s on-demand lending solutions make it easy to access the cash flow and capital your business needs to continue growing. With our integrated technology, your business can improve cash flow, access and provide business finance, set up pay-later plans with customers, and align your cash flow with customers. Our tools not only help business owners to become more strategic, but it help businesses access what they need most for growth – stronger cash flow and working capital.
Download our guide on how to boost cash flow and grow your business faster. Click here.
*This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.