CBA joins invoice finance sector to support more businesses

Business suppliers having a discussion

Commonwealth Bank has announced it’s partnering up with fintech lending platform Waddle to expand its business banking portfolio to invoice finance

For context, invoice finance is a line of credit secured against your business invoices, allowing you to access working capital otherwise tied up in accounts receivables.

As CBA’s group executive of business banking Mike Vacy-Lyle said, it’s a step beyond the traditional process of using fixed assets such as property or equipment to secure a business loan or overdraft.

"The loan size reduces automatically as invoices are paid so customers never pay for credit limits they don’t need,” he said. 

CBA said its new digital lending product known as Stream Working Capital will fund up to 80% of outstanding invoices, while charging mid to high single-digital interest rates. 

The big bank has set a minimum amount of $50,000 per invoice, and like most other invoice finance lenders, its services will be limited to business-to-business transactions only. 

Stream Working Capital can be accessed around the clock, and will use the latest technology and a live feed of customer data via cloud accounting software such as Xero to pinpoint a customer’s specific cashflow needs. 

CBA expects that automation will reduce manual credit processes by up to 80%, which could mean quicker approval times. After applying, businesses could receive funding in just 72 hours, as opposed to weeks. 

“We want to simplify the working capital process, especially for small businesses,” said CommBank’s executive general manager of business lending, Clare Morgan.

Morgan added that the current environment has created a need for invoice finance. 

“We’ve heard from our customers that they want to be able to hold more inventory and build relationships with more suppliers to mitigate supply disruption. They also face increasing pressure from suppliers wanting to be paid earlier and buyers wanting to extend payment terms,” she said.

“Using invoices to access credit addresses this issue and can provide some peace of mind for businesses who can now access cash locked up in their invoices to be able to pay suppliers or hire employees.” 

Stream Working Capital is available from this week for eligible small businesses, but will be rolled out to a broader range of customers in the next six months. 

Invoice finance beyond the big banks 

But of course, CBA isn’t the only lender to offer invoice finance. 

A number of non-bank lenders such as Octet, Timelio and ScotPac also specialise in invoice finance, and in some cases, their approval speeds are even faster, with funding potentially available in just 24 hours. Read on for a snapshot of their key features …

Octet invoice finance
  • 0% interest for first 60 days (from 6% after)
  • Funds up to $10 million
  • Fast 24 hour approval

Octet’s invoice finance is top of its game when it comes to flexibility, with facilities that can hold funding between $100k and $10 million, depending on your business situation. Applying online could take just two minutes and approval is possible in 24 hours, after which you could receive up to 85% of your invoice funds upfront. But to qualify for Octet’s invoice finance, your business ideally needs to have been trading for 1-2 years and have an annual turnover of $1 million.

Timelio invoice finance
  • Accepts international invoices
  • Funds up to $100 million
  • Approval in 24 hours

Timelio understands that every business has their own unique needs. So with its invoice finance, it not only offers personalised rates but also a wide funding range from $10k up to $100 million. And if you work with overseas customers, you’ll be happy to know Timelio accepts international invoices as well. The online application process could take as little as 10 minutes to complete, with approval possible in one business day. Once approved, you could receive up to 100% of your invoice value (less fees), or up to 90% of your overseas invoice value if you export and have overseas customers. Even better, Timelio has no restrictions in terms of minimum annual turnover or trading period although your invoice must be at least $10,000.

ScotPac invoice finance
  • Access 95% of invoices upfront
  • Funds up to $150 million
  • Same-day approval

ScotPac’s invoice finance caters to businesses both big and small, with funding sizes ranging from $10k up to $150 million. Applying online could take only 10 minutes, but you’ll also have the option to speak to someone over the phone. If you’re in a rush, same-day approval could be in the books, and you can receive up to 95% of the approved value (minus fees) in your facility in 24 hours after that.

Keen to keep shopping around? Then make your next stop Mozo’s business loans comparison hub, where you’ll be able to weigh up fees and features of bank and non-bank business loans.

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