Popping the cash flow question: Why brokers should rethink SME finance

The next SME funding opportunity may already be sitting in a broker’s database. We spoke with Mendy Ash, national senior business development manager at Bizcap, about why asking the right questions can uncover funding needs hiding in plain sight, turn existing client relationships into new opportunities, and help brokers support SMEs beyond the next transaction.

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The next SME funding opportunity may already be sitting in a broker’s database. We spoke with Mendy Ash, national senior business development manager at Bizcap, about why asking the right questions can uncover funding needs hiding in plain sight, turn existing client relationships into new opportunities, and help brokers support SMEs beyond the next transaction.

Mendy Ash
National senior business development manager Bizcap

From Bizcap’s perspective, what are the biggest pressures SMEs are navigating at the moment, and how are those pressures affecting their approach to funding?

Cash flow pressures - that’s the key.

We’re seeing ASX-listed businesses through to SMEs and everything in between. The global and the local economic environment has created pressures on business owners.

However, it’s important to note that whilst there are cash flow pressures, a lot of businesses are forecasting for what’s to come in a positive light and wanting to take on a facility now to invest.

So, we’re not only seeing distressed businesses who are looking to borrow today, we’re seeing savvy business owners who are looking at growth over the next 12 months.

How much of the demand for alternative finance is coming from businesses looking to grow rather than survive?

I think we’re seeing a lot of legacy issues with business owners being presented with opportunities to grow their businesses, but feeling like getting access to the capital they need is too hard.

For example, a construction business might have the opportunity to take on a new job, but have 24 hours to make a deposit. They’ve got time constraints, and it’s going to 5x their income, but they need credit to unlock the opportunity.

So credit can give business owners a lot of flexibility. It’s changing the way they think.

Do you see a change in the role brokers are playing in how they work with their SME clients?

Brokers are the financial support to a lot of business owners. They need a car, they go to a broker; they need a home loan, they go to a broker.

I’ve been at Bizcap for four years. When I first started, a lot of the brokers we were getting introduced to or speaking with were good at that commercial stuff, be it a property purchase, an asset or whatnot, but they never had the cash flow question with the client.

Now you’ve got a client in front of you: what percentage of your database is self-employed? How often do you have the cash flow question?

We’re here to support you. Don’t turn a blind eye to it. It’s a big opportunity.

I’ve been at Bizcap for four years. When I first started, a lot of the brokers we were getting introduced to or speaking with were good at that commercial stuff, be it a property purchase, an asset or whatnot, but they never had the cash flow question with the client.
- Mendy Ash

What should brokers be looking for in their clients’ businesses that could indicate a current or future funding need?

It’s not just funding that next facility and then moving on. I think it’s being constantly in touch and understanding. Like, if it is a commercial property, what fit-out do they need for this commercial warehouse that they’ve just purchased? You’ve done the funding for it, but what about the additional facility to help with the cash flow?

If it is an asset finance broker, you’ve just done the vehicle. What about the on-road costs?

It’s about understanding what the business is after and what they’re looking to achieve. If you’re a transactional broker at the moment, personally, I feel you’re being left behind.

What separates brokers who communicate the context of a deal effectively to lenders?

The full story. As in, we’ll deal with some brokers who will potentially leave important facts down the end of an email or leave the important facts at the end of a conversation as a “by the way”. We’re an open-minded lender, and we understand that, with business owners, there’s going to be bumps and chinks across the road.

What we see separates a good broker is that information. Tell us what’s going on, tell us what you know, what’s upcoming, why the income is seasonal, why there’s been a dip in business performance.

All that information allows us to make a really educated decision, and we’re here to do that. Again, we understand businesses are not A plus B equals C, and it’s why a lender like us exists.

We’re an open-minded lender, and we understand that, with business owners, there’s going to be bumps and chinks across the road.
- Mendy Ash

Where does Bizcap fit within the broader funding mix for an SME?

We don’t just have one product, we have a full range from bridging finance to line of credit products.

Sometimes we’re a solution to a short-term problem, but a lot of the time we’re a consistent solution, so businesses do come back. We’ve funded a lot of clients 30 or 40 times.

What are the key things brokers stand to gain from working with Bizcap?

Support and consistency.

It’s about being able to see the client holistically, really assess what’s going on and what they’re looking for, sometimes telling them that there’s another solution that’s better and being able to really sort of support them along the way.

Mendy Ash
National senior business development manager Bizcap

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Bizcap is Australia’s most open-minded lender, dedicated to empowering small to medium-sized enterprises with fast access to flexible loans. With our easy online applications and efficient end-to-end processes, we can approve loans from $5,000 to $7,500,000 in as little as 3 hours and fund them that day.

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