Small businesses to access billions in untapped cash

Small businesses will get faster access to cash flow through flexible credit based on their unpaid customer invoices, with the launch of CBA’s Stream Working Capital – a fully digitised working capital solution.

Group Executive of CBA Business Banking, Mike Vacy-Lyle, said: “Cash flow is one of the key issues facing small businesses, so we have been looking at how we can support customer’s working capital requirements helping them maximise cash flow and drive business growth.”

“While small businesses traditionally use fixed assets such as property to secure an overdraft or loan, we have developed Stream Working Capital which will allow customers to access funds by using their outstanding invoices as loan security. The loan size reduces automatically as invoices are paid so customers never pay for credit limits they don’t need.”

In a first for a major Australian bank and in partnership with innovative lending platform Waddle, Stream Working Capital will use the latest digital technology and a live feed of customer data via cloud accounting software such as Xero, to underpin a business customer’s working capital needs.

Stream Working Capital offers businesses improved cash flow and is accessible 24 hours a day. It also allows for access to larger and more flexible financing as the business grows, as well as reducing manual processes by up to 80 per cent. This means less hassle for business owners and faster credit decisions, with time from application to funding just 72 hours – down from a typical industry standard of weeks.

On a global scale, receivables funding solutions in Australia lags behind Europe and the United States. This means there is currently untapped potential to deliver billions of dollars of additional funding to Australian businesses.

Executive General Manager, Business Lending, Clare Morgan said: “Having access to cash flow is vital for every Australian business, whether they are a sole trader or one of Australia’s largest companies. We want to simplify the working capital process, especially for small business. This new digital solution means businesses can get faster access to cash flow to cover short-term operational needs and be better placed to leverage fixed assets for longer term strategic goals and investments.

“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.

“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. It’s an essential part of helping small businesses recover and grow as they continue to navigate a new operating environment during the pandemic.”

Founder and director of Waddle, Simon Creighton, said: “We’re delighted to partner with CBA to make it easier for small businesses to access capital. We’re passionate about supporting small businesses to grow. We see this as alleviating processes that take time – like automating much of the finance process like credit assessment, underwriting and monitoring. It also gives small businesses the ability to better manage cash flow, which is critical in today’s environment, and this partnership will provide the flexibility and support they need.”

Credit limits will be tailored to the business and will rise and fall in real time based on the value of current outstanding invoices. The more customer invoices nominated, the higher the available limit. Businesses will not have to pay an establishment fee and can use as much or as little as they need. Interest will only be paid on the amount businesses draw down, with interest calculated daily on the outstanding balance.

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