Debtor financing company, FactorONE is setting up shop in Western Australia as an increasing number of SMEs look beyond the banks to source funding for their businesses in the aftermath of the mining downturn.
Gary Green, previous national sales director for Bibby Financial Services across Australia and NZ will head the FactorONE team in WA.
Green said small and medium businesses are the driving force behind WA's strong economic growth; however, the WA market is facing challenges due to the downturn in the mining industry and the decrease in bulk commodity prices.
“This downturn has had an adverse flow-on effect for related mining services businesses and for business confidence in general for SMEs in WA,” he said.
“The drop in confidence is providing opportunities for factoring specialists such as FactorONE to meet the increased demand for working capital and cash flow lending for SMEs, where the traditional funders such as the banks are either unable or unwilling to provide finance approval.”
Green says brokers are crucial for FactorONE and he expects that they are going to play a big part in generating business.
“Finance brokers and other intermediaries are a key channel for FactorONE; we expect that 50% of new business enquiries will be sourced by finance brokers. Debtor finance, or factoring, is a niche product that allows finance brokers to diversify and increase their income stream over and above traditional finance options such as residential lending and property and equipment financing.”
Becoming a referral partner with FactorONE can provide some big benefits for brokers, says Green.
“FactorONE is a broker friendly non-bank lender and we offer a market leading referrer and commission scheme that provides significant rewards for brokers including an upfront fee and trail commission for the life of the deal. FactorONE also can demonstrate a can-do attitude for new business which means we can in most instances offer a financing solution to assist your existing clients.”
FactorONE is a specialist division of national debtor and trade finance specialist, Scottish Pacific. Its core business focus will be on fast growing start-ups through to more mature SMEs that don’t meet the banks' lending criteria.
“The recent Scottish Pacific SME Growth Index, a survey of more than 1200 SME owners nationally, indicated that availability and conditions of credit are key barriers to SME business growth. This is certainly the case in WA,” Green said.
“77 percent of the SMEs forecasting revenue growth said they were required to use personal assets as collateral for business growth. Factoring is a way for small business owners to remove the stress of having the family home on the line to finance their business.”
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