Powered by MOMENTUM MEDIA
the adviser logo
Lender

Lender trials merchant cash advance through brokers

by Annie Kane5 minute read

Brokers will soon be able to offer SME clients a merchant cash advance product, as an SME lender looks to expand its offering through the broker channel.

David Goldin, the founder and CEO of SME lender Capify, revealed that the lender had begun rolling out a pilot of its merchant cash advance product through the broker channel and will be looking to expand it out more broadly “very shortly”.

Speaking to The Adviser, Mr Goldin elaborated: “There are very few people in the Australian market who have a true merchant cash advance product.”

Noting that Capify had rolled out a similar offering in the US, Canada, the United Kingdom and now Australia, Mr Goldin said that the product “works with the customer”.

Advertisement
Advertisement

“It's really a great product because it allows any SME that accepts eftpos and card payments to have a variable repayment. So, rather than a fixed payment on a daily, weekly or monthly basis, this is a percentage of their sales until they pay off the cash advance. This means that, if their sales slow down, their payments slow down, so we only get paid if our customer gets paid,” he said.

Mr Goldin added that this works particularly well with businesses that are affected by seasonality, as it “reduces the repayment pressure”.

Following on from a recent $135 million cash injection from Goldman Sachs Private Capital to “accelerate the growth of its lending business to Australia’s small and medium-sized enterprises (SMEs) through its business loan and merchant cash advance products”, Mr Goldin told The Adviser that the broker pilot formed part of the business’ aim to grow its presence in the third-party channel.

We’re actually increasing our footprint throughout Australia – we’ve hired (and are in the process of hiring) business development managers through the country to make sure we have local coverage and can significantly increase the volume of business that we do with brokers.”

The CEO also revealed that the SME lender was also “actively seeking potential synergistic acquisitions” in light of other recent capital raise, stating that this could be in the form of “a strategic product or a strategic distribution channel” that would help accelerate growth.

“Sometimes it’s better to buy versus build,” he said. “Rather than start from scratch [we could] instead buy the company with subject matter expertise in that particular product and distribution channel already in place.”

Mr Goldin added that these potential acquisitions would be for “either a new SME product or new SME distribution channel”.

He concluded: “Looking forward, we will be rolling out our new partner portal, giving us even more enhanced technology for reporting for our broker channel; we are working on certain new technology available in the marketplace that will make our decisioning process faster and more automated; rolling out new products; and increasing our local presence in various regions of Australia for the brokers.”

[Related: SME lender eyes growth following $135m credit line]

capify ta

Annie Kane

Annie Kane

AUTHOR

Annie Kane is the editor of The Adviser and Mortgage Business.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Stephen Hale ta

MFAA launches near-prime, specialist loan resource

Coined Finance for when your customer doesn’t fit the mould: A broker’s guide to near-prime and...

READ MORE
Daniel Newell Gedda

Specialist lender LoanU rebrands to Gedda

The personal and auto loan provider LoanU, which specialises in helping Australians with impaired credit histories...

READ MORE
tech tools

CBA introduces AI technology to combat scams

New figures released by the competition watchdog this week have revealed that Australians lost more than $2 billion...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more