Cash flow is (still) king

Lender's head of partnerships unpacks what the road to recovery looks like for Australian SMEs

Cash flow is (still) king



Cristian Fedrigo

Head of strategic partnerships,



With changing business conditions, it is difficult for business owners to plan ahead effectively. Now more than ever, brokers have an opportunity to play a meaningful role in delivering proactive solutions to clients. Ensuring SME clients have the security of a working capital buffer for when they need it is critical.

According to a recent ABS survey, since the beginning of COVID-19 restrictions over 60% of Australian businesses have sought external advice, with the most common issue being a need to understand all the available support measures. It revealed that nearly 30% of small businesses only have enough cash on hand to support operations for less than three months, and 19% have enough to last between three and six months.

At times like this, brokers are being called upon to provide critical support to their clients on financial resilience, supporting their endeavours to future-proof their businesses with the right cash flow solutions.

Ongoing access to cash flow

Understanding how much a business needs and how long it needs it for requires extensive planning and cash flow forecasting, which can be quite complicated given the economic circumstances. Now is the time to actively engage with alternative finance partners to explore new or additional options should they be required.

The road to recovery and beyond

Increasing the level of debt in a business is not always the right solution.

With the resurgence of COVID-19 in Q2, declining revenues and worsening expectations have had a meaningful impact on SME confidence. Recent data surrounding the $40bn Government SME Guarantee Scheme points to an activation rate of less than 5%, with anecdotal feedback suggesting business owners are reluctant to increase their amount of business debt in the midst of so much uncertainty. Feedback also suggests there are concerns around committing to three-year repayment schedules, even with the six-month repayment holiday.

But as the curve in Victoria is flattened, hotspots in other states are controlled, restrictions are eased and borders slowly reopen, the timing may now be right to be more proactive and think about the opportunities ahead in a post-COVID world.

Preparation and planning can provide a competitive advantage for brokers and a huge benefit for business owners. Access to and certainty of cash flow in the back pocket of businesses can be a key differentiator for success. With recovery ripe on the horizon, a flexible cash flow solution that is readily accessible will enable businesses to emerge as front runners in the market with reduced competition and to grab greater market share.

A better solution

At GetCapital, we recognise that time is precious and the importance of delivering solutions that help brokers manage their customers’ expectations. 

Our ‘bankless’ Business Overdraft is an Australian-first solution that can be linked to any existing business transaction account. Business owners can establish an account today and transact whenever funds are required. Without incurring any excessive set-up or line fees, it is an elegant tool to prepare for the recovery.

As a revolving facility, the Business Overdraft uses unique technology, providing us with access to real-time banking data to make faster and better-informed credit decisions. The bankless nature of the facility gives brokers more visibility and control over the customer experience, bridging the broker-client communication gap that is often inherent in typical traditional bank overdraft transactions.

With no establishment, line, drawdown and exit fees, the GetCapital Business Overdraft is an essential tool for brokers looking to deliver a competitive advantage to their customers.

Find out more on protecting your clients’ cash flow and staying proactive by downloading our Business Overdraft toolkit – it has everything you need to start the conversation.

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