By Jon Sutton

Cashflow and working capital needs are always top of mind for business owners, and never more so than now.

There’s a lot of media coverage about supply chain finance (SCF) at the moment, and in particular how many suppliers who have been relying on early payment for their cash flow are now looking for alternative sources of working capital due to the withdrawal of a major SCF supplier.

Despite the “greens shoots” in parts of the economy, a lot of businesses are still doing it tough. Many are trying to find a way through the ongoing challenges presented by the pandemic, with some SMEs planning for the imminent withdrawal of the JobKeeper stimulus at the end of March.

Recent events mean there are fewer large corporates offering early payments, so now many suppliers who have become accustomed to being paid early are facing a return to lengthy payment times (sometimes as long as 90 to 120 days).

It’s important that these business owners have options when it comes to working capital solutions and the good news is that there are lenders, like ScotPac, eager to help.

Invoice finance is one particularly relevant working capital option for suppliers. Invoice finance does not get a lot of media attention, yet it is a proven funding solution that has worked well through boom times, recession, the GFC and every economic environment in between.

It might help to start with a simple explanation on how invoice finance and supply chain finance differ.

Supply chain finance is a style of lending that targets the buyer, not the supplier. It is provided to larger businesses who then pay their small business suppliers early, in return for a discount. If you’re a supplier whose customers use SCF you get early payment on individual invoices, at the discretion of the buyer. If not all of your customers use SCF, you won’t be able to access all the working capital tied up in your debtors’ ledger.

Invoice finance (also known as debtor finance) gives a business owner a revolving line of credit, secured against the total receivables of the business and available for them to draw on anytime they want. This puts the supplier business in control and can help ease any cashflow challenges, including customers not paying quickly enough.

Why ScotPac? We partner with you

Not all small businesses find it easy to access bank funding. With so many challenges in 2021, it’s important for business owners and their trusted advisors (like their accountants, brokers and bookkeepers) to know that non-bank funders such as ScotPac, and funding such as invoice finance, can really make a difference to cashflow and ultimate success.

ScotPac deals directly with business owners from wide range of industries including transport, labour hire, manufacturing and wholesale, throughout Australia and New Zealand. For each client we tailor a specific solution from our wide range of flexible products including invoice finance, trade finance and asset finance.

We work with any existing funding relationships a business may have (including their main bank), to put in place the best possible funding solution.

Even more important than getting the best solution is ensuring you have a true partner so that you get the right ongoing assistance. That’s why we provide a dedicated relationship manager for each client to ensure they are supported during the many swings and roundabouts of running a business.

Where to from here?

While the pandemic has thrown some business funding models into chaos, we have been very successful in riding out the 1-in-100-year pandemic-induced recession and in helping our clients not only to weather the storm but also to take advantage of market opportunities.

This puts ScotPac in an excellent position to help businesses with their working capital finance needs – and as Australasia’s largest non-bank lender to SMEs, it’s something we’ve specialised in for more than 30 years.

If you’d like to know more about a whole range of small business funding options, including and beyond debtor finance and supply chain finance, please check out the ASBFEO-ScotPac Business Funding Guide. Educating the small business sector and their advisers on a broad range of funding is really important to us, that’s why we partnered with the Small Business Ombudsman to create this guide.


If you’d like to talk about how ScotPac can fund your business or your client, contact 1300 177 495 to find out more about debtor finance and how ScotPac works.