Business Lender Uses Tech to Reduce ‘Time to Yes’ by 90%

When a local transport business recently applied for debtor finance funding through ScotPac, Australia and New Zealand’s largest non-bank lender to small and midsized businesses (SMBs), the typical time for approval could take up to several weeks.

But in this case, ScotPac said, it only took 30 minutes as it was able to sync all the application data and provide a same-day formal approval, with funds for a $1 million limit facility available the next day.

“This is a game changer for business owners and their advisers,” ScotPak CEO Jon Sutton told PYMNTS. “Anyone who knows small business knows how time-poor SME owners are, and how crucial it is to provide them with quick and easy access to finance.”

That origination and underwriting experience for business funding was created by ScotPac and Trade Ledger, a global digital lending platform innovator.

With the combination of Trade Ledger’s data-driven lending platform and ScotPac’s asset finance offering, application turnaround time has been reduced by 90% and new business volume has grown 300% in the last 12 months.

“Our tech initiatives allow us to integrate massive amounts of data from a range of sources as well as automate time-consuming manual processes,” Sutton explained. “Our ‘time to yes’ has materially reduced — this is good news for SMEs.”

Cash Flow Management

Cash flow has always been crucial, but it’s more important than ever amid the current economic uncertainty. SMBs have no choice but to protect balance sheets and have cash available to cover their own debt, oftentimes while waiting to be paid themselves. It’s a crucial balancing act, especially for SMBs that are pursuing new business and growing.

Cash flow always ranks in the top three concerns for business owners, ScotPac has found. The company conducts extensive research twice a year via its SME Growth Index. Since launching the poll in 2014, it has found in each round that 80% or 90% of the business owners say their business has issues with cash flow.

“It’s so important for businesses to find the right funding support — we’ve seen that with the events of 2020, and it’s a factor that’s not going away,” Sutton said. “ScotPac is able to provide business owners with simple, fast funding products that offer them the best chance at success.”

Un-served Businesses

A large part of the SMB market in Australia and New Zealand — and globally — has not been served by traditional bank products. Sutton explained that these un-served businesses don’t want to risk the type of security banks typically require, such as the family home (if they even own property to use as security). Others have significant unpaid invoices they’re waiting to be paid or have complex funding requirements that are not an easy fit for other funders.

Read more: Half Of SMBs Manage Cash Flow Crunch By Not Paying Rent Or Vendors

Not surprisingly, many business owners give up and pour their own funds into the business.

“ScotPac has a strong [30-year] track record of helping these types of SMEs, due to our sector knowledge, our capability to fund across asset classes and our ability to put together complex funding deals,” Sutton said.

Access to Finance

Still, he said, many business owners are unaware of the options they have beyond traditional banks. Even those who are aware didn’t have time to investigate and understand the range of alternative product offerings.

As a result, ScotPac joined forces with Australia’s Small Business Ombudsman to create a Business Funding Guide to educate business owners and their advisers about the breadth of funding available and what works best in different business scenarios.

The partnership with Trade Ledger, too, has been crucial to unlocking that market. This is part of a range of tech initiatives ScotPac is putting in place to give SMBs quick, easy digital decisions on their funding applications. In addition, the business owner will know at every stage where the application is and what is required.

At the same time, ScotPac continues to develop close relationships with its customers and share its depth of knowledge of the SMB sector and ScotPac’s ability to make deals happen.

“Our ability to make this happen is why we are seeing increasing demand for our growing suite of financial products,” Sutton said.