How fintech for business borrowers is improving
New startup Skippr shows how fintech innovation is about more than just financing.
Fintech (financial technology) has always been about innovation, and it seems business finance is leading the charge. The need for business loans and the lack of options for owners who don't meet the criteria of traditional banks has seen a surge in demand for alternatives. It just so happens that fintech companies have been there to offer some innovative solutions.
Startup Skippr is one such company.
“SMEs are the backbone of our economy, but nearly half will fail as a result of poor cash flow," said Pat Crivelli, founder of Skippr. "Empowering SMEs to take control of their finances means more competition, innovation, productivity and growth for Australian businesses."
Skippr is a new finance platform that not only helps SMEs access finance but also helps them better understand their financial situation. According to co-founder Alistair Lamond, the vision for Skippr is to become a robo-advisory tool for an SME.
"Skippr is approaching SME cash flow more holistically by providing them tools to better understand, control and optimise cash flow. We have developed a cash flow forecasting tool that is free to an SME which enables then to simply forecast cash flow by connecting to their online accounting software. In compliment, they can use a selective invoice finance tool to "optimise" their cash flow," he said.
This point of difference could be crucial in what is becoming a competitive fintech marketplace. Still in early days of the business, co-founders Lamond and Crivelli are focused on developing the innovative platform, which offers free cash flow forecasting, invoice financing for SMEs and investment opportunities for those looking to buy invoices.
A marketplace lending structure has been the go-to choice for many fintech loan startups, and according to Lamond, it comes down to being able to offer more flexible solutions to borrowers.
"Often SMEs have a concentrated number of customers. Traditional banks, being one regulated source, can only take so much exposure to that end-customer (debtor), which in turn makes the line of funding more restrictive and expensive. This is a very common problem for SMEs with traditional funders. Skippr doesn't face this problem as investors can manage their investment by diversifying risk across multiple invoices," he said.
With a marketplace of stakeholders, technology is at the core of Skippr's business.
"Our technology provides more transparency and, in turn, more efficiency to all stakeholders involved in the cash flow cycle. This results in better-informed business operators and stronger customer relationships. It also creates more opportunity for businesses to tender bigger deals, buy more inventory or negotiate better terms with suppliers," said Crivelli.
Australian registered SMEs providing products or services to other businesses can apply to Skippr as long as they have six months trading history and more than $100,000 in turnover.