With most business owners aware of finance options to secure equipment, including tools of the trade and plant equipment, recent Moneytech data suggests there is less awareness of how finance can assist businesses, especially service-based businesses, beyond equipment needs.

Finance types available to Australian SMEs can assist with a range of business challenges including growing debtor ledgers, slow invoice payment, cash flow management, facilitating import and export opportunities, stock and raw material purchasing, cyber-security, and investing in growth opportunities.

In the March quarter, the Australian Bureau of Statistics reported business investment increased 3.4%, with finance used primarily to invest in machinery and equipment purchases. [i] 

While this data is pleasing, indicating business confidence, it further demonstrates the strong association between finance and equipment purchasing and business finance can be used for so much more than acquiring new equipment. SMEs should be looking at how they can utilise finance to be strategic and seize opportunities to benefit their business.

In the current climate, inflationary pressure is one such challenge which can be assisted with finance with SMEs able to use it to secure raw materials and ensure price and supply.

Using finance to approach supply chain management is a focus of SMEs with logistics and materials challenges. Different finance facilities catering to supply chain management can allow SMEs to plan for medium and long-term requirements, but need to be flexible and accommodate ongoing support for businesses.

AminoZ case study

Launching in 2006 and supplying health supplements to local fitness clients, AminoZ’s operation soon morphed into a larger retail operation servicing a growing online customer base, and has evolved from a one-man organisation, to a thriving enterprise servicing hundreds of thousands Australian customers.

To keep up with increasing product demand, founder and owner, Jay Bonaretti started manufacturing his own AminoZ branded supplements in 2019.

“As a manufacturer we soon hit a major problem. Covid-19 hit, there were global supply chain problems, and we couldn’t get enough ingredients. Desperately trying to source ingredients locally and internationally was very difficult and soon Jay realised the only way he could meet demand was to purchase ingredients in bulk,” Bonaretti said.

“As a small business, we just didn’t have the cash flow to do this. A finance solution from Moneytech allowed us to import the ingredients in bulk and save a significant amount of money – well into six figures, due to the size of the order.”

Moneytech’s finance facility allowed AminoZ to keep its products in stock and grow the business substantially.

Moving away from bank borrowing

Adding to the range of finance products available is the increasing ability for SMEs to move away from traditional bank borrowing or home mortgage re-financing to fund their business. SME business owners should be aware that different business lending may require personal property as security for the loan. Business owners should do their homework, especially where property is concerned.

The ease, speed and flexibility that non-bank lenders provide actually make non-bank lending the first option that some SMEs choose when they are looking to secure finance.  Non-bank lenders typically have strong technology infrastructure, which makes the application and assessment process simple and easy.

Mark Cameron is chief business officer at Moneytech.

[i] https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release