working capital Archives

How to get the best business loan: 5 ways to secure smart business financing

Posted on October 31, 2025 by Russell Walsh

Summary:

Securing the best business loan is vital for SMEs to manage cash flow and fund growth.
SMEs that prepare strong financials and clear forecasts can negotiate better terms.
Working with finance brokers and exploring non-bank lenders expands funding options.
Building trusted lender relationships helps businesses access flexible, long-term finance.

After a turbulent few years of rate hikes and easing, Australia’s small and medium enterprises (SMEs) are once again adjusting to a cautious Reserve Bank of Australia (RBA) – though for how long is anyone’s guess.

Following a series of rate cuts earlier in 2025, the RBA has held the cash rate steady at 3.60% since August. Borrowing costs remain elevated, and are likely to stay that way for some time. For businesses seeking finance to manage cash flow or fund growth, the focus now shifts from chasing cheaper finance to securing smarter finance.

The good news? Despite higher rates, growing competition between banks and non-bank lenders means SMEs are in a stronger position to secure flexible, well-structured credit facilities. Those who prepare well, know their numbers and approach negotiations strategically will be best placed to secure the most favourable terms.

5 strategies to secure the best business loan for your SME

Body: To strengthen your negotiating position, preparation is key. Lenders will assess your business’s risk and creditworthiness, so you want to present your enterprise in the best possible light and be ready to address any concerns upfront.

1. Make sure you have robust financials and projections

Body: To strengthen your negotiating position, preparation is key. Lenders – whether a big bank manager or an online fintech platform – will assess your business’s risk and creditworthiness. You want to present your enterprise in the best possible light and address any concerns upfront.

“Lenders in general look for timeliness, accuracy and consistency in financial reporting – and those are the same fundamentals business owners should use to monitor performance,” says Nigel Thayer, Director Working Capital Solutions – WA at Octet. “Accuracy enables the right decisions to be made, and often at the most competitive prices.”

Strong, consistent reporting signals reliability and gives lenders evidence that your business is well managed. The more clarity you provide, the easier it is for lenders to offer better rates, higher credit limits and more flexible terms.

2. Work with a business finance broker

A business finance broker can make all the difference when it comes to securing the best small business financing at the best rate.

“Make sure you have a commercial finance broker who’s experienced and communicates regularly,” Sonja Pfitz, Director of Pfitz Financial & Business Solutions. “Don’t use a mortgage broker – they’re very different. Commercial brokers also need to understand asset finance, working capital, and short-term loans.”

It’s important to be prepared to spend some time with your broker to identify the best finance for your business. “The more time you spend, the better they can understand your business and secure the right funding,” says Sonja.

A broker can open doors to lenders you may not have considered – and help you avoid facilities that don’t fit your needs. They’ll also handle the legwork of comparing offers, saving time and strengthening your negotiating power.

3. Negotiate to secure the best business loan terms

Every component of a loan is negotiable – not just the headline rate.

Be prepared to discuss fees (such as establishment fees, monthly service fees and early repayment fees) and how the facility is structured. Everything is on the table if you have a decent credit profile.

“Before entering negotiations, assess your company’s financial position, credit history, and the value you bring to the lender,” notes Faster Capital, a venture capital firm. “Companies with strong balance sheets and consistent revenue streams are in a better position to negotiate favorable terms.”

Look beyond the rate to areas that can have a real impact on cash flow – like fee waivers, longer repayment terms, higher advance rates or seasonal flexibility.

“Securing advantageous credit terms can significantly impact a company’s liquidity and overall financial health,” explains Faster Capital. “It’s crucial to approach these negotiations with a strategic mindset, aiming for a win-win scenario that benefits both the borrower and the lender.”

Even small changes to these details can make a big difference to the overall cost and usability of your finance. Lenders may have limited scope to move on interest margins, but they often have more room to adjust structure and fees.

4. Explore non-bank lenders for more flexible business finance

SMEs are increasingly exploring non-bank lenders for business finance. Non-bank lenders have grown their market share in recent years and offer faster approvals and more flexible terms than traditional lenders.

“The research shows clearly that firms with higher revenue and those in primary, secondary and logistics industries will be demanding more tailored working capital solutions from non-bank lenders, Brett Isenberg, co-CEO of Octet, explains. “This is to help navigate the current and upcoming economic turbulence.”

And unlike most banks, they typically do not require real estate collateral for moderate-sized loans, relying instead on the business’s cash flow and credit data for underwriting. As a result, owners can raise cash without risking their personal assets.

5. Build strong relationships with your business lender

Relationship banking matters more than ever. Don’t treat your lender as an adversary – instead, involve them as a partner in your business’s success. Cultivating a solid relationship with your finance provider can also give you an edge when negotiating future credit facilities.

Communicate proactively and honestly. Keep your financier informed of your business performance – not just the good news but also any challenges.

“Octet is great at this,” says Sonja. “Their Business Development Directors & Client Managers are highly experienced across different industries and their staff base is stable, so clients aren’t shuffled from person to person. That consistent communication makes a big difference.”

Regular, open communication builds trust, which translates into flexibility. A lender who understands your business is far more likely to offer support when you need it, whether that’s a temporary credit extension or a quick turnaround to take advantage of a new opportunity.

H2: Finding the right fit for your business essential

Business lending is key to business stability and growth – but it’s critical to choose solutions that are tailored to the unique needs of your business. Whether you’re exploring new funding or reviewing your existing facilities, taking a strategic approach ensures your finance works for you, not against you.

Preparation and clear communication are everything. By understanding your numbers, exploring your options and building strong relationships, you can turn tight credit conditions into opportunity.

At Octet, we offer expert guidance and tailored working capital solutions, such as Invoice Finance and Trade Finance, designed to unlock cash and improve liquidity. Talk to our team today and take control of your cash flow.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

The real cost of late payments for small business owners

Posted on October 10, 2025 by Russell Walsh

New research suggests late payments are having a serious impact on Australian small businesses, creating cash flow problems and – in extreme cases – forcing some into bankruptcy.

Late payments rose to the highest rate since March 2021, with B2B late payments also on the rise. CreditorWatch revealed 74% of small businesses experienced overdue payments. When you narrow the lens to the construction industry, that number jumps to 92%.

The impact on small business cash flow is profound. Xero found late payments were costing Australian small businesses $1.1 billion dollars a year.

Late payments strain less cash flow, which can impact a business’s ability to take opportunities or invest in growth – sometimes even requiring business owners to dip into personal funds to meet payroll requirements.

Cost of living crisis driving surge in late payments

“It’s basically a perfect storm,” explains Gold Coast business owner Bevan , who runs a small landscaping company with a staff of six.

“Costs have gone up across the board, which means our margins are smaller, but then in turn, clients are taking longer than ever to pay.”

Bevan says the implementation of automated payment reminders has helped a little bit, but the impact on cash flow has meant having to delay bigger jobs and find work-arounds.

“As a small business, having a safety net of cash is crucial,” he says.

“I’ve lost count of how many times I’ve had to dip into my personal money to cover costs – including payroll, on some occasions – not because I wasn’t bringing in enough revenue, but because there were so many outstanding invoices yet to be paid.”

Widening ripples in small business community

And then there’s the other side of late payments: they’re contagious.

For fledgling businesses, particularly those in the first few years of operation, one of the biggest risks of late-paying customers is the ripple effect.

Small business owners waiting on cash to come in are also more likely to default or delay on payments of their own.

“There have been times when I’ve had to put off paying supplier invoices because I’m waiting for a big lump sum to come in and someone hasn’t paid,” says Bevan.

Kathy Sozou, partner at restructuring firm McGrathNicol told the Sydney Morning Herald this “contagion effect” has put some businesses at risk of bankruptcy, not to mention that it can have a chain reaction that impacts the wider economy in a vicious cycle.

“If the developer falls over, suddenly every supplier in that chain that was reliant on them is exposed,” she explained.

“If you’re manufacturing all the windows for the developer, but suddenly there’s no construction for a year, what are you doing? It just wipes out entire vertical lines of supply chains.”

How small businesses can manage late payments and stay ahead

While late payments may feel like an inevitable part of doing business, small businesses don’t have to simply absorb the impact. Alongside best-practice credit control, working capital finance solutions provide a powerful safety net that ensures cash flow remains steady — no matter when customers pay.

“One of the most effective tools is invoice finance (also known as debtor finance),” explains Dan Verdon, Octet’s Director of Working Capital Finance Solutions – NSW. “Rather than waiting 30, 60 or even 90 days for settlement, businesses can unlock up to 85% of an invoice’s value straight away. That means they can cover payroll, supplier payments and tax obligations on time, without stress.”

Similarly, trade finance provides the upfront capital needed to pay suppliers, even if your customer invoices are still outstanding. “Paying suppliers on time not only protects your reputation,” says Dan, “but it also helps secure better terms and ensures reliable delivery to your own customers.”

For businesses supplying larger corporates, supply chain finance can be a game-changer. By leveraging the financial strength of bigger customers, it enables SMEs to receive faster payments, removing the pressure caused by long settlement cycles. And when unexpected gaps arise, term loans act as a flexible buffer, covering essentials like wages or overheads while waiting for funds to clear.

Finance solutions work best alongside good credit practices: conducting due diligence before entering contracts, automating invoice reminders, and offering multiple payment options. Relationship management is another vital layer. According to B2B payment platform Resolve, 70 percent of suppliers report higher loyalty when offering early payment discounts, which lead to a 30 percent reduction in disputes and delays.

“Ultimately, best practice is about prevention and protection working hand in hand,” Dan adds. “Good processes keep payments flowing, while working capital solutions provide resilience when they don’t.”

Octet can help your business breaking the late payment cycle

Late payments aren’t just a financial nuisance — they’re a compounding threat that can destabilise even the most well-run small businesses’ cash flow. One overdue invoice can quickly escalate, affecting supply chains, forcing owners to dip into personal funds and stalling critical growth plans.

While some factors are outside a business owner’s control, building in safeguards like stronger payment terms, proactive credit checks, and flexible cash flow strategies can make all the difference. Staying ahead of the risk means planning for cash flow volatility, not reacting to it.

“As economic pressures intensify, the ripple effects of unpaid invoices can spread fast, and that’s what makes them so dangerous,” explains Dan. “But the right financial tools allow business owners to break the late payments cycle and take back control.”

At Octet, we offer expert guidance, tailored working capital solutions, and incentive programs designed reduce the impact of late payments and unlock cash to improve liquidity. Talk to our team today and take control of your cash flow.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

8 cashflow management strategies for franchisees

Posted on October 1, 2025 by Russell Walsh

Cash flow is one of the most persistent operational challenges for Australia’s 94,000 franchise owners.

No matter whether you’re opening your first location or managing a network of established sites, ongoing royalties, marketing fees, supplier payments, rent, and day-to-day operating costs like wages and utilities, the outgoings of a franchise can often outpace incoming revenue.

We explore eight practical strategies to help franchisees take control of their cash flow and build financial resilience.

The complex costs of running a franchise

Managing cash flow for a franchise isn’t just about balancing sales with supplier payments – it’s shaped by a web of recurring fees and operational outgoings. These typically include:

Upfront investment: Franchise buy-in fees, fit-out costs, and initial stock purchases.
Royalties: Often set as a percentage of your profits.
Marketing and advertising fees: Mandatory contributions to national or regional campaigns.
Operational expenses: Wages, utilities, insurance, compliance requirements, and local marketing.
Rent: Often one of the largest, fixed and ongoing franchise costs.
Maintenance or property upgrades: Essential for maintaining brand standards.

These fixed and variable outgoings can place a constant drain on cash flow. Even the strongest-performing franchises can experience short-term liquidity pressures, making flexible access to capital an important part of financial planning.

8 strategies for managing your franchise’s cash flow

Strong cash flow management also comes from consistent, proactive operational practices. These strategies can help you stay ahead of potential challenges and build a more resilient business.

1. Build and a cash flow forecast

A detailed financial forecast helps you anticipate shortfalls and plan accordingly. It’s particularly valuable in the early stages of a franchise, when startup costs are high, so you can keep enough cash on hand to keep operations running smoothly. It’s crucial to review and update your forecast regularly, you can spot potential problems early and take corrective action before they escalate.

2. Plan for seasonal fluctuations

Use your forecast to identify seasonal fluctuations and set aside reserves in high-revenue months to cover expenses during slower times. This forward planning helps avoid cash shortages and keeps your business financially stable year-round.

3. Manage your inventory efficiently

Avoid overstocking, which ties up valuable cash, and use “just-in-time” ordering where possible to keep inventory lean. Regularly review sales data to identify slow-moving items and adjust purchasing to match demand.

4. Optimise your staffing levels

Wages are often one of the largest ongoing expenses for franchisees. Use smart rostering tools to match staff hours to customer demand, reducing unnecessary labour costs while maintaining service quality.

5. Negotiate supplier terms

Work with suppliers to secure favourable terms, such as extended payment deadlines, bulk-purchase discounts, or rebates. Trade finance can be an effective tool to increase your purchasing power and take advantage of supplier offers.

6. Control operating expenses

Regularly review costs such as utilities and insurance to ensure you’re getting value for money. Cutting or renegotiating even small recurring costs can add up to significant annual savings.

7. Maintain a cash reserve

Keeping a modest buffer allows you to cover unexpected expenses – like equipment breakdowns or sudden increases in supply costs – without disrupting your operations.

8. Leverage working capital solutions

Even with the best planning, there will be times when expenses and revenue fall out of sync. Having access to a flexible working capital facility gives you the breathing room to manage short-term cash flow gaps without derailing operations or growth plans.

How working capital solutions can help franchisees

When expenses and income don’t align, flexible working capital solutions can provide fast access to funds for supplier invoices, payroll, tax liabilities, equipment repairs, or other operational needs – helping franchisees avoid disruptions and keep the business running smoothly.

Beyond bridging short-term cash gaps, these solutions can enable franchisees to take advantage of supplier discounts for early payment, bring on extra staff during busy periods, or fund expansion.

Having funding available when it’s needed allows franchise owners to focus on building their business, responding to market opportunities, and maintaining high service standards – without being held back by short-term financial pressures.

Keep your franchise running smoothly

Octet’s working capital solutions, such as a line of credit with flexible repayment terms, can help franchise businesses and their franchisees with cash flow management, ensuring they are well-positioned to seize growth opportunities.

If you manage a franchise network, or you’re a franchise owner, and want to learn more about how we can help, get in touch with the team today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Business uses debtor finance to unlock full potential and scale operations

Posted on September 26, 2025October 8, 2025 by Russell Walsh

A family-owned business founded 10 years ago has built a solid reputation as a specialist provider of traffic management services.

Renowned across regional Western Australia for its safety, technical competence and strict compliance standards, the company has strong relationships with mining companies, councils, civil contractors and government agencies.

However, significant sales growth was creating cash flow challenges that threatened their continued expansion.

Growth success creating cash flow strain

The company was experiencing the classic issue of success outpacing financial resources. Despite its exceptional sales and a healthy client base, the company’s liquidity was stretched due to the cash flow challenges typical of project-based work. Upfront costs for labour, equipment and materials had to be covered before invoices could be raised, while delayed payment cycles and retention amounts tied up much-needed working capital.

Without sufficient working capital to cover upfront project costs, they were forced to be selective about new opportunities, even those that could drive further growth. The business was also managing an ATO repayment plan, which added further pressure to their already strained cash position.

Adding to these stressors, approximately 50% of the company’s sales were concentrated with a single, large mining operation. This was excellent for revenue stability but it also meant that most of the company’s cash flow was stuck in unpaid invoices from one client.

Project delays, change orders and material cost volatility further amplified the unpredictability of cash flow timing, making it difficult to maintain operations or plan for growth initiatives.

Unlocking growth with Debtor Finance

Needing a finance solution to fuel further business growth, the company reached out to Octet.

“Traffic Management operations, in fact any labour-oriented businesses, often face particular cash flow pressures due to the nature of their work and the payment terms common in the construction and mining sectors,” explained Nigel Thayer, Octet’s Director Working Capital Solutions – WA. “Our solution needed to unlock the substantial value tied up in their outstanding invoices while providing the flexibility to scale operations confidently.”

Nigel worked with the company to structure a $2.25 million Debtor Finance facility to address their cash flow challenges. The debtor finance facility converted their unpaid customer invoices into immediate working capital, allowing the business to access up to 85% of their invoice values upfront.

This solution directly addressed the company’s core challenge by reducing reliance on client payment timelines. Importantly, the confidential nature of the facility meant that the company’s clients remained unaware of the financing arrangement, preserving the strong relationships they had built over their 10-year history. This was particularly crucial given their significant relationship with their major mining client.

“The beauty of this solution is that it grows with the business,” said Nigel. “As their sales continue to expand and they take on larger jobs, the facility automatically scales to provide the working capital support they need without requiring renegotiation or additional approvals.”

Improved liquidity driving sustained growth

With immediate access to cash previously tied up in unpaid invoices, the company now operates with the financial confidence needed to bid on larger contracts without the constraint of upfront capital requirements.

The improved cash flow position has enabled the business to negotiate early-payment discounts with suppliers, directly improving their project margins and overall profitability. They have also been able to invest in upgraded equipment and skilled labour, enhancing their service delivery capabilities and competitive positioning in the regional market.

Crucially, debtor finance has provided the necessary cash flow to maintain and reduce their ATO repayment plan, removing a significant source of financial pressure. The improved liquidity has also allowed the owners to repay shareholder loans that had been injected into the business during earlier growth phases, strengthening the company’s balance sheet and reducing personal financial exposure.

“This business now has the financial flexibility to take on additional customers and larger orders with staggered payment terms and can plan their growth with confidence,” said Nigel. “They’re no longer constrained by cash flow timing issues and can focus on what they do best – delivering safe traffic management services across regional Western Australia.”

With their solid financial foundation now in place, the company is well-positioned to continue their growth trajectory while maintaining the high standards that have built their reputation in the market.

Optimise your cash flow and growth potential with Octet

Debtor Finance or Invoice Finance can unlock the full potential of established businesses ready to scale operations. For companies in a wide range of business, such as labour hire, transport and wholesalers, Octet offers tailored debtor finance solutions designed to address the unique cash flow challenges of project work while supporting sustainable growth and operational efficiency.

Talk to our working capital specialists today and take the next step toward sustainable growth.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Start the financial year strong: Expert tips for how to improve business cash flow

Posted on June 26, 2025August 14, 2025 by Russell Walsh

For many businesses, the start of a new financial year places renewed pressure on cash flow.

“Typically coming out of EOFY, what we see is many SMEs face a cash flow squeeze that can catch them off guard. Tax liabilities, superannuation payments and supplier payments often hit the business all at once,” says Nigel Thayer, Director Working Capital Solutions – WA at Octet. “The business may be profitable on paper, but without sufficient cash flow the business can fall under immense stress.”

That’s why the new financial year is the perfect time for businesses to reset. “Reviewing their finance facilities – or lack thereof – can help the business identify underused capacity or inefficient structures, and correcting this can propel them into the new year in a much stronger cash position,” says Nigel.

He shares practical strategies on how businesses can improve their liquidity and make better funding decisions heading into the new financial year.

When to review your cash flow strategy

Wondering whether it’s time to revisit your cash flow strategy? Nigel says there are few red flags businesses should look out for.

“The first sign is that cash flow gaps are growing – not shrinking – and there’s an ever-growing reliance on owner injections of cash to keep the business moving,” he says. “Increases to debtor days are another indicator. This could relate to taking on more new jobs with longer trade terms, or more worryingly, it might signal that customers are having cash flow issues and dragging out payments.”

Another sign is growth without tangible progress. “The business might report strong sales, but overall growth is stagnant – often because working capital is trapped somewhere in the cycle,” he explains.

If this sounds familiar, Nigel recommends a deeper review with your accountant or broker. “There are solutions that deliver immediate positive results.”

Unlocking cash stuck in the cycle

One of the most effective ways to boost cash flow is by reviewing where money gets locked up – like unpaid invoices or upfront supplier payments.

“This could be working against the business and restricting its growth and true potential,” says Nigel. “By implementing funding facilities that complement the business’s cash conversion cycle, you can unlock working capital that supports the business and promotes growth.”

Two underused tools stand out: Debtor Finance (also known as Invoice Finance) and Trade Finance. Aligning these tools to your cycle can materially reduce funding gaps for businesses.

“Invoice finance turns receivables into real-time funding rather than waiting 30+ days,” Nigel says. “On the payables side, trade finance is underused as a way to extend supplier terms without damaging relationships or missing early payment incentives.”

Use rolling cash flow forecasts to stay ahead

In times of economic uncertainty – or even just busy trading periods – a rolling cash flow forecast is one of the best tools a business can have.

“It typically allows a business to see ahead 13 weeks and identify where shortfalls may occur, when large payments fall due or when growth opportunities might need injections of cash,” says Nigel. “The key is that it’s not static – it allows the business to continually reset, adapt and adjust the forecast to the circumstances.”

A rolling forecast gives decision-makers visibility, and helps with funding approvals.

“Lenders in general look for timeliness, accuracy and consistency in financial reporting – and those are the same fundamentals business owners should use to monitor performance,” Nigel explains. “Accuracy enables the right decisions to be made, and often at the most competitive prices.”

Don’t wait for a cash flow crisis

Nigel’s recommendation to business owners at the beginning of the financial year is simple: don’t wait.

“Too often we see business owners thinking about adopting a working capital funding facility – they know it’s needed, but they get busy or some debtor receipts come in, and they feel that momentary relief,” he says. “But the underlying cash flow issue hasn’t been resolved. It invariably returns – and they’re back to square one.”

Delaying action can have serious consequences. “We’ve seen good businesses in highly stressed positions – taxes unpaid, creditors blown out, owners at breaking point – all because they waited too long to fix the underlying issue.”

The smarter path? Engage your trusted advisor now. “Invest the time to ensure the business is properly funded to get off on the right foot in the new year,” Nigel says. “That time investment will enable the business to make forward decisions – not just fight fires with a dwindling bucket of water.”

“At Octet, we’re specialists in working capital funding,” Nigel adds. “We identify where cash is getting stuck and tailor our tools – like invoice finance, trade finance and supply chain solutions – to release it back into the business. It’s never one-size-fits-all. Understanding the client’s business and applying that specialisation is what sets us apart.”

Keep your cash flowing

Strong cash flow is the key to business stability and growth – and we’re here to help at every stage. At Octet, we offer expert guidance and tailored Working Capital Solutions, such as Invoice Finance and Trade Finance, designed to unlock cash and improve liquidity. Talk to our team today and take control of your cash flow.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Minimum wage increase: How will it impact cash flow for Australian businesses?

Posted on June 16, 2025June 16, 2025 by Russell Walsh

The new financial year will bring a fresh round of cost increases for Australian businesses. From 1 July, the national minimum wage will rise by 3.5%, and the compulsory superannuation guarantee will increase to 11.5%.

While the changes will deliver a welcome boost to the take-home pay of around 20% of Australian employees, many business owners are facing the reality of higher wage bills, squeezing margins and placing renewed pressure on cash flow.

“Small businesses are facing a cost crisis across energy, rent, insurance and input costs,” said Luke Achterstraat, CEO of Council of Small Business Organisations Australia (COSBOA).

“[The] decision of a 3.5% increase – which is above the current rate of inflation – will have ramifications for our small business engine room, many of whom are struggling to make a profit on already razor thin margins.”

Wage and super increases will drive up costs for award-reliant industries

The food and beverage and retail sectors, which employ large workforces on or near the minimum wage and typically operate on narrow margins, are expected to feel the sharpest pressure from the minimum wage increase, making them more vulnerable to any disruptions in cash flow.

A single delayed customer payment or an unexpected expense may be enough to trigger a short-term cash shortfall – particularly for businesses with seasonal income patterns or irregular payment cycles. A recent survey by Xero found 87% of Australian small businesses were already facing cash flow challenges.

In some cases, the squeeze on profitability may force business owners to reconsider their expansion plans, delay investments, or pass costs on to consumers through higher prices.

Consumer spending may increase, but short-term cash flow challenges remain

While wage increases will create immediate financial pressure for many business owners, it’s not all bad news.

Rising minimum wages often support household consumption and broader economic stability. In its recent Annual Wage Review decision, the Fair Work Commission (FWC) noted that increases to the modern award minimum wage are likely to have a positive national economic effect by strengthening consumer spending and sentiment.

When wages rise, lower-paid workers typically have more disposable income – and much of that additional income flows back into the very businesses that employ them. The FWC highlighted that sectors such as retail and food services are “well-placed to benefit” from any uplift in consumer activity generated by the higher minimum wage.

However, while this broader stimulus may help offset some pressures in the long run, it does little to ease short-term cash flow challenges.

Proactive cash flow management strategies for small businesses

The minimum wage and superannuation increases represent a permanent shift in employment costs for many Australian businesses. Understanding the full impact on cash flow – and addressing it early – will be key to maintaining financial stability as operating costs rise. Business owners should update their cash flow forecasts to reflect the full cost impact and identify any potential funding gaps.

One of the most immediate actions businesses can take is to revisit payment terms across their supply chains. Negotiating longer payment windows with suppliers can offer breathing room, allowing more time for revenue to flow in before payments are due.

Another option is Debtor Finance (also known as Invoice Finance), which unlocks cash tied up in outstanding invoices to smooth out working capital fluctuations and ensure businesses can meet rising wage and superannuation obligations without disrupting daily operations or long-term plans.

For growth-focused businesses, Trade Finance can offer valuable flexibility when cash flow is tight, allowing businesses to invest in stock purchases, equipment upgrades or marketing activity without draining their cash reserves.

A finance partner to help you navigate rising employment costs

With wages and superannuation on the rise, many businesses will feel a strain on cash flow. But with the right cash flow management strategies and working capital finance solutions, SMEs can manage higher costs while staying on track for growth.

Talk to Octet’s working capital experts today to explore how we can support your business through these changes, and beyond.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Election 2025: How the major parties’ policies compare for SMEs

Posted on April 22, 2025April 22, 2025 by Russell Walsh

With the Australian federal election looming on May 3rd, Australia’s major political parties are sharpening their pitches – not just to voters, but to the country’s 2.5 million small and medium-sized businesses.

From tax write-offs to workforce reform, the policies proposed by Labor and the Coalition reflect different visions for the future of Australia’s economy.

In this guide, we break down the headline business policies from each of the major parties.

Labor – Short-term relief and workforce reform to support a sustainable economic recovery

Labor is leaning toward short-term financial relief and structural workforce reform when it comes to supporting businesses, with longer-term incentives tied to sustainability and skills development. Here’s what’s on the table:

Instant asset write-off: Many small businesses were surprised when the budget didn’t include an extension to the instant asset write-off. But Labor has said it will extend the policy by 12 months if it wins the election. The party’s rationale for an extension rather than making the write-off permanent – which the Coalition has proposed – is to encourage businesses to invest in growth now.

Power bill relief: Labor plans to reintroduce the $150 electricity rebate for households and small businesses, paid in two instalments from July 2025. This is part of a wider plan to ease energy cost pressures amid ongoing cost of living and inflation concerns.

Apprenticeship wage support: A $10,000 bonus wage for apprentices in the housing and construction sector is on Labor’s agenda, to be paid over the course of training to tackle skills shortages and support its housing targets.

Ban on non-compete clauses: Labor announced plans to ban non-compete clauses for workers earning under $175,000 in this year’s budget, which will come into effect in 2027. The treasurer, Jim Chalmers, said the clauses were “holding too many Australian workers back from going to better-paid opportunities or setting up small businesses”.

Investment in energy transition: Labor continues to support clean energy policies, including funding for renewable infrastructure. While less directly tied to SMEs, these investments aim to lower long-term energy costs and create supply chain opportunities in emerging sectors.

Coalition – Tax cuts and deregulation to boost growth and confidence

The Coalition’s business policies centre on tax relief, deregulation, and incentives that aim to stimulate economic activity and reduce red tape for SMEs. Here’s a breakdown of the key proposals:

Instant asset write-off: The Coalition has committed to lifting the instant asset write-off threshold to $30,000 for businesses with an annual turnover under $10 million, and making the scheme permanent.

Meals and entertainment deductions: Under this proposal, eligible businesses will be able to deduct up to $20,000 annually for dining and entertainment expenses (excluding alcohol). The policy is pitched as a way to support the hospitality sector.

Fuel excise cut: In response to cost-of-living concerns, the Coalition proposes halving the fuel excise for one year, reducing it from 50 to 25 cents per litre, which could lower transport and logistics costs for SMEs.

Apprenticeship hiring incentive: The Coalition plans to implement a $12,000 incentive for SMEs to hire new apprentices or trainees in priority sectors, such as construction. The payment would be staggered over the apprenticeship term, providing ongoing support for employers.

Right to disconnect repeal: The party wants to reverse newly implemented “right to disconnect” laws, which allow employees to ignore unreasonable after-hours work communications without penalty.

Vehicle efficiency standards rollback: The Coalition wants to scrap the New Vehicle Efficiency Standard (NVES), which requires automakers to meet emissions targets. They argue the NVES raises costs for popular vehicles used by individuals and small businesses.

Industrial relations deregulation: The Coalition has indicated it would repeal several of Labor’s recent industrial relations changes, although specific reforms haven’t been fully detailed.

Australian Greens – Support for small businesses and local economies

The Greens policies for small businesses are “focused on giving small businesses and cooperatives the support they need to thrive in tough economic times”. Key policies include:

Grants for small businesses: The Greens want to support small business growth and innovation by establishing an incubator, which will provide 1,000 grants of $250,000 and 10,000 grants of $50,000 – $75,000 for startups and cooperatives that “enhance local economies and create jobs”.

Instant asset write-off: Like Labor, the Australian Greens have proposed extending the $20,000 instant asset write-off and the Small Business Energy Incentive Scheme to 1 July 2026.

Teal Independents – Focused on simplifying regulations

The Teal Independents haven’t announced any specific policies for small businesses, however, they are pushing to reduce “red tape”.

Small business definition: Late last year, eight independent federal MPs signed a letter to Employment Minister Murray Watt, calling on him to change the definition of “small business” from 15 employees to 25.

Tax reform: Allegra Spender, independent member for Wentworth, has also advocated for tax reform. “I don’t have any particular views on the answers, but I am saying that we need to put [proposals to increase taxes including the GST, superannuation and abolishing negative gearing] on the table and properly consider them,” Spender said to the Financial Services Council.

What should businesses take away from the election policy debate?

Both Labor and the Coalition have made clear overtures to SMEs – but their strategies reflect different philosophies. There are some clear winners, including the construction and hospitality sectors.

No matter which party wins the Federal election, businesses will need to stay agile. Changing policy landscapes create both opportunities and risk. Being prepared – and well-informed – will be key to making the most of what’s ahead.

While the election outcome is yet to be decided, Octet helps businesses prepare for uncertainty and risk. We offer fast, flexible funding solutions, such as Trade Finance and Debtor Finance, to manage cash flow, drive growth and support your goals. Connect with our team today to explore how we can power your business.

Business health check: is your business ready for 2025 and beyond?

Posted on December 29, 2024February 23, 2025 by Russell Walsh

In today’s uncertain and unpredictable business environment, ensuring your company’s resilience and adaptability is paramount. Conducting a comprehensive business health check allows you to evaluate your financial position, operational processes, talent, supply chain, and assets. This proactive approach helps identify strengths and weaknesses, enabling you to recalibrate strategies for sustainable growth.

This article outlines the benefits of performing a business health check and provides strategies to implement it effectively. These insights serve as a foundation for informed decision-making and long-term business sustainability across various industries. As we progress through 2025, let’s prepare your business to navigate upcoming challenges and seize emerging opportunities.

Business readiness checklist: 9 key considerations

1. Finances and cash flow

Begin your health check by assessing your financials. Reflect on questions such as:

How do our finances align with our overarching business objectives?
Are our financial procedures, like bookkeeping, efficient and up-to-date?
When was our last thorough assessment of the profit and loss statement?
Should we re-evaluate our cost structures?
What factors might impact sales in the near to mid-term?
What is our current net cash flow position?

Maintaining a three-way forecast—including profit and loss, balance sheet, and cash flow statement—is essential. Regularly tracking performance against these forecasts, ideally monthly, ensures that revenue aligns with targets and profit margins meet expectations. If margins are shrinking, investigate the underlying causes. Monitor expenses diligently, avoiding excessive discounting to boost sales, and manage fixed costs effectively. Explore potential savings across different areas.

A cash flow forecast can highlight potential shortfalls throughout the year. It’s crucial to have cash reserves or access to working capital facilities to cover these gaps. Ideally, businesses should maintain six months’ worth of fixed operating expenses in reserve. While this may not always be feasible, flexible working capital solutions from non-bank lenders can provide necessary support.

Additionally, staying current with tax obligations is vital. The Australian Taxation Office (ATO) has intensified efforts to address tax arrears, including reporting delinquent businesses to credit agencies, which can adversely affect credit scores. Relying on delayed tax payments or extended payment arrangements is unsustainable and can jeopardize financial stability.

2. Business operations

Evaluate your current operational structure. As laws and regulations evolve and your business grows, existing processes may require adjustments to support future objectives. Consider the following areas for improvement:

Performance Measurement: Implement actionable metrics to assess business milestones, achievements, and employee performance. This facilitates goal setting and future planning.
Technology and Equipment: Invest in software that streamlines processes or equipment that enhances efficiency and reduces costs.
Customer Feedback: Actively seek customer input and implement feasible changes to improve service quality.
Compliance: Stay informed about legislative changes affecting your operations to ensure ongoing compliance.
Supply Chain Resilience: Develop strategies to strengthen supply chains against potential disruptions.

While daily operations can be consuming, staying informed about industry trends and competitor positioning can offer valuable insights to refine your business practices.

3. Managing change and crises

Recent years have underscored the necessity for robust crisis and risk management plans. Crises can diminish income, disrupt sales, escalate costs, and damage reputations. A well-crafted crisis management plan enables swift and confident responses to various emergencies, including natural disasters, technological failures, or health crises. Key steps include:

Risk Assessment: Identify potential risks based on industry and location, and anticipate possible crises.
Response Planning: Develop detailed response strategies involving suppliers, staff, and resources. For instance, a product recall would engage product teams to identify defects and customer service teams to communicate with clients.
Leadership Engagement: Involve management in planning and provide necessary training. Discuss succession plans to ensure business continuity if key personnel become unavailable.
Employee Awareness: Ensure all employees understand their roles within the crisis management framework.
Communication Protocols: Designate representatives to liaise with stakeholders and the media during crises.

Consider developing multiple crisis management plans tailored to specific scenarios, such as IT security breaches or natural disasters. Numerous free tools and templates are available online to assist in crafting these plans.

4. People and culture

Assess your workplace culture and employee engagement levels. According to recent HR trends, businesses should recognize that employee satisfaction encompasses more than just compensation; it includes intellectual stimulation, opportunities for personal growth, well-being, and work-life balance. Key considerations include:

Demographics and Diversity: Understand the impact of an aging population and prioritize diversity and inclusion within the workforce.
Continuous Learning: Support employees in lifelong learning by offering opportunities to upskill or reskill.
Technological Awareness: Ensure all employees are informed about technological advancements, such as artificial intelligence (AI), and their implications.
Hybrid Work Models: Acknowledge that decentralized and remote workforces are now integral to modern workplaces.

Integrating AI and automation into HR processes can enhance efficiency. Digital assistants can address employee inquiries in real-time, allowing HR teams to focus on strategic responsibilities. AI can also streamline onboarding by automating paperwork and guiding new hires through induction processes. However, it’s crucial to balance technological integration with human interaction to maintain a supportive and engaging workplace environment.

5. Partnerships with suppliers and stakeholders

Reassessing relationships with suppliers and other external stakeholders, is a vital component of a business health check. To enhance these partnerships:

Alignment with Goals: Ensure supplier relationships align with current business objectives. If misalignments exist, consider renegotiating terms or exploring new partnerships.
Communication: Maintain open lines of communication. Discuss suppliers’ strategies for managing disruptions and risks, including their contingency plans.
Internal Processes: Review and optimize internal supply management procedures to ensure efficiency and clarity of roles.
Performance Monitoring: Implement systems to regularly assess supplier performance and provide constructive feedback.

6. Intellectual property

Intellectual property (IP) is a critical asset. During your health check:

Asset Inventory: Identify key products, services, business names, brands, and logos, and confirm legal ownership.
Protection Measures: While copyrights are automatic, consider formally registering trademarks, designs, and patents to secure legal protection. Trademarks, in particular, safeguard your brand and can appreciate in value as your business grows.
International Considerations: If operating internationally, ensure IP rights are secured in each jurisdiction to prevent potential legal conflicts.
Infringement Awareness: Regularly verify that your business does not inadvertently infringe upon others’ IP rights, as this can lead to costly legal disputes.

7. Cybersecurity

Cyber threats are an escalating concern. Recent reports indicate that in the 2023–24 financial year, over 87,400 cybercrime incidents were reported in Australia, averaging one every six minutes. Business email compromise and fraud were among the most reported cybercrimes, with small businesses experiencing an average loss of $49,600 per incident — an 8% increase from the previous year.

To bolster cybersecurity:

Software Updates: Regularly update software to protect against known vulnerabilities.
Multi-Factor Authentication: Implement multi-factor authentication to add an extra layer of security.
Strong Passwords: Enforce the use of robust, unique passwords.
Data Backups: Regularly back up data to secure locations.

By adopting these strategies, businesses can enhance their resilience against the evolving landscape of cyber threats.

8. New technologies

Embracing emerging technologies like artificial intelligence (AI) and automation unlocks new growth opportunities. Key applications include:

Data Analytics & Optimisation: AI enhances inventory management, logistics, and fraud detection.
Customer Insights & Marketing: AI analyses purchasing patterns for personalized recommendations and targeted campaigns.
Recruitment & HR Efficiency: AI streamlines hiring by screening applications and identifying top candidates.
Content Creation & Branding: Tools like ChatGPT assist in generating social media posts, blogs, and ad copy.
Operational Improvements: Automation reduces inefficiencies, cutting costs and improving workflow.

To maximize benefits businesses should invest in AI integration and employee training to foster innovation, scalability, and competitive advantage in a digital landscape.

9. Growth goals

Sustainable business growth requires careful planning and execution. Key strategies include:

Enhancing Core Offerings: Strengthen high-performing products and explore innovation opportunities.
Competitive Analysis: Identify market gaps and differentiation strategies by studying industry trends.
Securing Funding: Ensure access to capital for expansion while maintaining service quality.
Empowering Employees: Upskill teams and leverage untapped talent to drive growth.
Strategic Partnerships: Collaborate with suppliers and distributors to expand market reach.
Market Expansion: Explore new regions, eCommerce, and digital opportunities.

Regularly review marketing strategies to align with growth objectives and strengthen your brand identity.

In summary, a proactive approach to financial management, operational efficiency, technological adoption, and strategic planning positions businesses to navigate the complexities of 2025 successfully. Engaging with experienced finance partners, like Octet, can provide the flexible support needed to seize opportunities and achieve sustainable growth.

Health retailer Go Vita was expanding its supplier list, product lines and stores. It needed the finance to make that happen and Octet put in place a long-term working capital solution that allowed Go Vita to grow while maintaining cash flow.

When Vinomofo needed finance to fund its expansion plans, Octet delivered a flexible trade finance facility that gave the online wine retailer the fast finance solution it needed.

A healthy business starts with the right finance

When Vinomofo needed finance to fund its expansion plans, Octet delivered a flexible trade finance facility that gave the online wine retailer the fast finance solution it needed.

Begin your business health check with Octet

Ready to do a business health check? Reassessing your financial position is a great place to start.

Octet is the finance partner of choice for ambitious businesses of all sizes across a range of industries. Our customised working capital solutions, including trade finance, debtor finance and supply chain finance, have unlocked countless opportunities for our clients.

So, what’s next for your business? Discover what’s possible when you partner with us.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Growth finance: how flexible business finance funds progress

Posted on October 1, 2024November 27, 2024 by Russell Walsh

Businesses face many challenges, and when they strive to grow, they often find that growth hampered by inadequate funding, or working capital. So how do they evolve?

In this article, discover the factors that limit business growth and explore why using cash in the bank or profits is sometimes an unsustainable approach to funding growth. If you’re ready to progress your business, it’s time to consider growth finance and find out how tailored working capital solutions can provide the right support for sustainable growth.

Growth challenges: why most businesses fail to grow

Is your business failing to grow despite your best efforts? Business growth can be difficult at the best of times, but in an environment of global uncertainty, rising inflation and slowing economies, even the world’s most successful companies are struggling to increase revenues.

McKinsey & Company conducted a wide-reaching study of the growth and performance of the 5,000 largest public companies in the world over the past 15 years. The average revenue growth in the 10 years before COVID-19 was just 2.8% a year. Only one in eight businesses surveyed enjoyed a growth rate of more than 10% a year. The post-COVID-19 years haven’t been any easier.

Economic conditions aside, businesses also make common mistakes when trying to expand. Octet’s NSW Director of Working Capital Solutions, Dan Verdon, identifies a few factors that can hinder meaningful growth and, therefore, profits.

A need for more strategic planning. “Businesses with a well-defined and communicated strategy, which aligns with their short-, medium- and long-term goals are much more likely to be successful.”
A need for more capital. “Most businesses underestimate the level of capital required for sustainable growth.”
A need for understanding where cash flow is tied up in the business. “There are four main cash flow levers: accounts payable, accounts receivable, inventory and their own cash. Understanding how to use each of those sources and when is really important.”
Scaling too quickly. “A lot of businesses might have a good product or a good service, but they grow too rapidly and then can’t sustain it.”
A need to acquire and retain talent. “Attracting and retaining good people, especially in highly skilled roles, is a major challenge for a lot of new businesses.”

The sustainable way to grow

For the best chance of success, it’s also important to identify where to concentrate your growth efforts. McKinsey & Company has discovered that businesses give themselves a much greater chance of outperforming when they invest in three pathways for growth:

Expanding the core business by focusing on excellence in the areas in which they currently operate.
Innovating in adjacent markets by seeking ways to adapt to serve new customers.
Developing breakout businesses by identifying and exploiting new opportunities.

“Having a finance partner who can help you understand what levers to pull and unlock cashflow tied up in your business can help growth in all three areas,” says Dan.

Leveraging business growth finance for expansion

To fund their growth, many businesses set annual budgets based on previous yearly figures and use internal sources of funds, such as their profits or cash in the bank, rather than external financing, such as a loan or line of credit. However, this approach can affect profitability and hamper growth by leaving businesses without the financial flexibility to invest in innovation. While avoiding debt might seem preferable, if profits are down or cash flow slows (say, due to customers taking longer to pay their bills), a business’ ability to scale, innovate and compete effectively is seriously impacted.

As we head into 2024, the economic challenges of high inflation, rising costs and a slowing global economy will continue to put a strain on business profits. Using finance to fund expansion makes sense. “Working capital facilities can support and encourage sustainable growth,” says Dan. “They are self-liquidating, so come with fewer risks than, say, a traditional fixed-term bank loan.”

How Octet can assist with financing business growth

So what are working capital finance solutions, how do they fund expansion and how can a financier such as Octet support business growth?

A streamlined working capital solution, such as Debtor Finance, (also known as invoice finance) allows businesses to access funds tied up in unpaid invoices to accelerate cash flow. By freeing up this cash, a business can capitalise on growth opportunities. This could include importing goods from new suppliers and exploring different product lines.
Looking to expand into different regions? Octet can support your business through a Trade Finance facility. Dan explains: “Say the business is in Australia and wants to expand into another country, but they can’t get finance facilities in that country. With Octet’s facility, they can donate a portion (or all) of the limit to the overseas entity (subject to the Australian parent’s credit assessment) and then use that funding for their overseas business growth requirements.”
An Octet Term Loan allows businesses to borrow up to $2 million, with flexible terms ranging from three months to three years, to unlock additional working capital to expand operations or acquire new assets.
Octet can help your business with the process of onboarding new local or overseas suppliers. “We do the verification checks of those suppliers so the business knows they’re trading with someone who is legitimate.”
Octet tailors our flexible funding solutions to a business’ needs. “We bring all the different working capital solutions – debtor finance, trade finance, credit cards – into one smart ecosystem.”
Octet helps businesses increase the visibility of their entire supply chain, allowing them to see and act on potential blocks or gaps. Supply Chain Accelerate is a flexible funding solution that pays 100% of supplier invoices instantly, while giving businesses up to 90 days to repay.

A finance solution that grows with you

Octet has a suite of fast, flexible finance solutions we can tailor to power your business growth. Speak with our team of working capital experts today to discover what’s possible for your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Why supplier relationships matter and what you can do to improve them

Posted on October 1, 2024November 21, 2024 by Russell Walsh

When you’re busy growing a business, it can be easy to focus on day-to-day operations and let the big picture take a backseat. For many buyers, this can see them taking their suppliers for granted and expecting them to deliver more, without first building the foundational relationship to support it.

Supply chain pressures have continued to evolve post-COVID, reshaping how businesses manage their relationships. While the immediate crisis may have passed, ongoing global challenges—such as geopolitical tensions, inflation, and technological disruption—are now pushing more businesses to recognize the benefits and necessity of strategic buyer-supplier relationship management. A stronger relationship between your business and its suppliers makes it easier to negotiate, meet your customer’s needs, and seize opportunities to grow together.

This article explores why it’s critical for businesses to go beyond building efficiency and cost-effectiveness in their supply chain strategy, and invest in fostering stable, reliable supplier relationships.

A close supplier-customer relationship is a win-win

While businesses often focus on the customer, the relationship between a business and its suppliers is about much more than just transactions. From navigating challenges together to negotiating stronger deals, building longstanding relationships is in both parties’ best interests.

Instead of a one-sided power dynamic, successful relationships are mutually beneficial partnerships. They create a collaborative environment where trust and cooperation replace purely transactional exchanges.

The risk of a one-sided business relationship

Despite the benefits of balanced partnerships, some businesses still struggle to recognize and respect this dynamic. Since its introduction in 2021, Australia’s Payment Time Reporting Scheme (PTRS) continues to play a key role in encouraging transparency and fairness between businesses, particularly with large corporations and small suppliers.

Businesses failing to pay on time not only face financial penalties but also risk serious reputational damage. Recent examples from 2023 and 2024 show how late payments have tarnished reputations in sectors like manufacturing and retail. Some large, well-known businesses have faced criticism for delayed payments, underscoring the importance of maintaining timely financial practices to protect their reputation.

This highlights the importance of being transparent about and managing your financial supply chain. Additionally, leveraging tools like fairly-negotiated early payment discounts as an incentive to strengthen supplier relationships remains an effective strategy. Businesses that do this create better relationships with their suppliers, ultimately offering an added cash flow benefit to their client rather than a default payment choice.

It’s about the intention behind the incentive.

Good relationships are worth the investment

Beyond compliance and reputational risk considerations, businesses that foster close supplier-customer relationships stand to gain significantly. Building these relationships by taking the time to get to know your suppliers, their business goals and the way they operate, can bring a host of benefits.

These include:

simplifying complex negotiations
securing better deals
reducing quality control issues and delays
supporting new product or sales initiatives
improving efficiency
enhancing customer service

Together, these factors create a unique competitive advantage that is difficult for competitors to replicate.

How to build business relationships with suppliers

There are several ways to improve your relationship with suppliers and set the foundations for a long-term partnership, apart from discovering how supply chain finance works.

Choose suppliers with values that align to yours

Building strong relationships is easier when you work with suppliers whose values align with your own. For example, if your business prioritizes sustainability, partnering with suppliers offering eco-friendly solutions strengthens both the relationship and your brand’s commitment to these values.

Maintain clear, consistent communication

Clear communication is the backbone of successful partnerships. Misunderstandings or unclear expectations can lead to delays and friction, impacting customer satisfaction. Ensure communication is two-way and well-structured by:

Using accessible communication tools
Clarifying terms, standards, and expectations upfront
Scheduling regular touchpoints to address updates and issues

Consider cultural differences

Global supply chains now face new challenges, including geopolitical and cultural considerations. Understanding cultural sensitivities and business practices in your suppliers’ regions can help build rapport and avoid misunderstandings. When in doubt, local consultants or in-depth research can help navigate these complexities effectively.

Establish clear processes

Streamlined processes reduce errors, delays, and frustration for all parties involved. Investing in automation tools and digital platforms not only enhances efficiency but also signals your commitment to operational excellence. Clear financial processes, such as prompt payment systems, further solidify trust.

Reward loyalty

Loyalty is key to fostering long-term partnerships. Instead of focusing solely on the lowest cost, businesses are increasingly recognizing the value that responsive, high-quality suppliers bring. Rewarding loyalty with consistent contracts or exclusive opportunities strengthens relationships while contributing to your operational resilience.

Relationships first

In 2024 and beyond, strategic supplier relationships remain a cornerstone of business success, even as industries embrace rapid technological advancements. Building people-centered partnerships not only ensures smoother daily operations but also positions your business for long-term growth and adaptability.

By fostering collaborative, mutually beneficial relationships, you can create a unique advantage that allows you to thrive in an increasingly complex environment.

Interested in building stronger relationships with your suppliers? Get in touch today to discover how Octet can help.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Financing trends: business game-changers in 2024 and beyond

Posted on September 30, 2024October 17, 2024 by Russell Walsh

The world of finance is evolving rapidly. Disruptive technologies, an increasingly connected financial landscape, and global uncertainty are challenging traditional finance models. The financing trends that have shaped previous years are evolving, while innovative new products are forcing businesses to rethink their approach to funding.

So, what are the trends in financial services that will shape the rest of 2024 and beyond? We explore six key trends that could change the way we all do business.

6 financial services trends in 2024 and beyond

1. Blockchain technology in financial services is on the rise

Blockchain technology, often associated with cryptocurrencies, extends beyond digital currencies to a range of industries and users.

In 2024, its application for supply chain management in small-to-medium-sized businesses is gaining traction. Blockchain-based invoice financing is transforming cash flow management by offering increased transparency, security, and efficiency, which can lead to a reduction in costs and a streamlining of processes.

“A prominent application of blockchain technology is decentralised finance,” says Octet’s Co-CEO, Brett Isenberg. “In traditional centralised finance, consumers and businesses borrow from a bank or via a broker. Decentralised finance challenges this by allowing peer-to-peer exchanges.”

While blockchain tech is currently used in the finance sector, Brett believes its use will increase exponentially in the years to come.

2. The industry is embracing AI and data analytics in financial services

Artificial intelligence (AI) and machine learning (ML), which provide insights and solutions at unprecedented speeds, are being used in tasks such as research and fraud detection. In 2024, there has been an even greater uptake of these tools with AI-driven supply chain management tools being used to help businesses predict disruptions, optimise logistics, and manage inventory more effectively.

“AI and data analytics have transformed the finance industry,” says Brett. “AI algorithms can analyse large data sets to identify anomalies that detect fraudulent activities and measure risks with greater accuracy than ever before.”

These technologies will also be increasingly used to enhance efficiencies, make decisions and improve customer service. “AI-powered chatbots and virtual assistants are getting better and better,” adds Brett. “The technology is also enabling more accurate and dynamic credit scoring by considering a much broader range of factors.”

3. Global growth has remained weak

In late 2023, the resilience of the global economy exceeded expectations, but global economic growth continues to face challenges in 2024. Political tensions, interest rate fluctuations, and economic policies are impacting financial services worldwide. China’s recovery has been weaker than forecast, global core inflation is rising, and high public debt continues in many countries. These factors had led the OECD to project lower global growth in 2024 compared with 2023.

In Australia, the Reserve Bank has kept interest rates on hold since November 2023, despite political pressure for cuts.

“This decision reflects ongoing concerns about inflation and economic stability”, states Brett. “Globally, many countries have cut rates to stimulate growth, but Australia’s unique economic conditions have led to a different approach.”

As such, businesses of all sizes must navigate these complexities to manage their cash flow and investment strategies effectively.

4. Increasing cybersecurity concerns

As financial transactions become more complex and frequent, cybersecurity remains a critical concern.

In 2024, Australia has seen a significant rise in data breaches, with notable incidents affecting millions of individuals. The Office of the Australian Information Commissioner (OAIC) reported a 9% increase in data breach notifications in the first half of 2024 compared to the previous six months.

Enhanced cybersecurity measures, such as multi-factor authentication and advanced threat detection, are essential to protect assets and maintain trust in financial services.

When combined with disruptive technologies such as AI and a shift to cloud-based systems, financial service providers will have to become more adaptable to protect their customers and offer the best services. Business leaders are being compelled to develop new strategies and explore innovation to counter challenges to security systems.

5. Innovative financial products are more readily available

While challenges are increasing, so too is innovation. The range of financial products available to businesses and consumers is growing, and as more businesses and consumers adopt digital solutions, new technologies and financial services have emerged.

“For example, a growing environmental awareness has increased the focus on sustainable financial products. So, there are now green bonds and sustainable investment funds,” says Brett. “Healthcare supply chain financing is an emerging area too.”

“Another innovation is the tokenisation of assets, which involves converting real-world assets into digital tokens on a blockchain. This has led to the creation of tokenised securities and other asset-backed tokens.”

6. Banks are being forced to embrace change

The banking industry is facing challenges from a slowing global economy, divergent economic conditions and disruption to their general business models. evolving financial landscape. Traditional banks must adapt amid higher interest rates, stricter regulations, climate change and technological advancements. Banks are now having to invest in robust platforms and adopt open banking requirements to collaborate with third-party providers. This shift is essential for improving customer service and engagement, helping banks retain important business customers.

“Traditional financial institutions have obviously been embracing tech for years, but it’s only in more recent times that it’s really pervaded certain products based upon business demand,” explains Brett. “At Octet, we have fundamentally changed the way buyers and sellers engage with each other on one platform — both in a local and international trading context. Traditional banks are also starting to invest in robust platforms and adopt open banking requirements to collaborate with third-party providers.”

Brett says banks are increasingly being forced to improve their customer service and engagement to retain important business customers.

The future of finance

Our innovative working capital solutions help you unlock the power in your business to thrive. Need a cash flow injection without the need for personal asset security? Our Debtor Finance facility allows you to convert up to 85% of your unpaid invoices into immediately available funding.

If it’s a revolving line of credit you’re after, our Trade Finance facility offers up to 60 days interest-free and 120-day repayment terms to pay local and international suppliers.

You can also unlock additional working capital to expand operations, acquire new assets or consolidate existing debt by activating an Octet Term Loan as part of your Debtor or Trade Finance facility.

Discover how Octet’s team of working capital specialists can help power your business growth today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Explore your options: How to get a business loan alternative in the freight and transport industry

Posted on August 20, 2024November 19, 2024 by Russell Walsh

Whether you’re operating long-haul or last-mile, one factor is crucial to transport industry success: healthy cash flow. It’s why transport and freight companies need solid financial partners in order to go the distance and strive for growth.

One option for improving your cash flow is exploring how to get a business loan from a bank. But a traditional loan has its limitations. The good news is there are many viable working capital alternatives that can drive your business to succeed.

Let’s begin by looking at some of the key challenges in the industry before reviewing available business funding options.

The industry challenges driving different types of business loans and funding solutions

In recent years, several challenges have significantly impacted the Australian transport and freight industries. Notably, volatile fuel prices and inflationary pressures on wages and operational costs continue to strain cash flow. Some persistent issues include:

high operational costs to cover vehicle maintenance, repairs, road user charges, toll charges, insurance, vehicle parts, vehicle registration and driver training and accreditation
Lengthy customer payment times with many businesses experiencing 30+ day payment terms
limited ability to pass on cost increases. For example, only a small percentage of trucking businesses can viably pass on increased fuel costs to customers, according to the Australian Trucking Association’s latest research

Allan Howe, Octet’s Working Capital Solutions Director for Queensland, notes that the cash flow squeeze caused by these challenges makes reliable funding solutions, such as freight finance, so vital for industry success.

“Typically, there is a cash flow gap in any transport operation,” Allan says. “You’ve got fixed costs such as insurance, wages, licensing and permits. Then, there’s your ongoing variable costs like fuel, maintenance and repairs. To compound matters, you’re generally only getting paid by customers every 30 to 40 days. Transport finance is therefore crucial in helping you to cover the cash gap.”

The limitations of traditional funding and business loan options

Traditional funding options for the transport and freight industry include:

Term business loans – usually in the form of a single disbursement that is repaid on a set schedule
Lines of credit – providing access to a set amount of funds where required
Bank overdrafts – offer access to extra funds when your businesses transactional account balance reaches zero

Businesses may choose between unsecured or secured traditional funding options, though many choose secured alternatives due to the higher interest rates generally associated with unsecured funding.

Allan says a major downside of traditional, secured funding options is that they tend to be property-backed, irrespective of whether it’s a standard bank loan, line of credit or bank overdraft. “As a result, many business directors use their own private assets as security to get funding,” he adds.

In addition to the risks associated with entangling personal assets with business assets, Allan cautions that traditional asset-backed funding options may have limitations for business growth.

“Property-backed traditional funding options will always be limited in their ability to release working capital to the business, and they won’t generally grow in sync with it. The funding options are only as flexible as the property’s value.”

Unlocking the power of trade finance and invoice finance for your transport business

Smarter, faster working capital funding alternatives to traditional bank loans are available. These include:

A trade finance facility, which is a flexible business line of credit where your financier pays your suppliers immediately while you repay your financier over time.
A debtor finance facility (also known as invoice finance) that enables a business to transform its accounts receivable into readily available cash. This process is sometimes referred to as freight factoring in the transport industry.
A term loan that unlocks additional working capital to expand operations or acquire new assets by as part of a Debtor Finance or Trade Finance facility.

Allan says that unlike traditional business funding options, alternative working capital solutions are designed to be flexible to grow with your business.

“If you get a bigger contract, your revenue may increase by 25% overnight. Your balance sheet must be able to support that. Working capital solutions can support this growth faster than traditional property-backed financing, where your funds are often limited to the property’s value.”

Allan emphasizes that dissatisfaction with traditional financing options has led many transport and freight companies to seek more innovative working capital solutions, like Octet’s debtor finance, to fund their growth.

“Many transport businesses come to us after a traditional financier has given them a property-backed overdraft. They’re frustrated. They can’t take their business to the next level because they need to increase their overdraft from $1 million to $2 million. Yet with a property-backed overdraft, they simply couldn’t get any further.”

The solution?

“Octet can tailor a debtor finance facility to suit your business needs. For example, one company we worked with in the transport and logistics industry was able to get increased working capital via our debtor finance solutions, with their funding limit recently doubling, minus the need to use personal assets as collateral.”

Go further with Octet’s working capital solutions

Your transport business needs a trusted finance partner to power its growth potential. Explore Octet’s range of intelligent working capital solutions to discover which product is right for your business. Contact our team of working capital specialists today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Understanding Working Capital Finance: A key tool for business growth

Posted on August 13, 2024September 10, 2024 by Russell Walsh

Working capital finance is a crucial business finance solution that helps organisations maintain adequate cash flow to effectively manage operational costs, invest in new distribution streams and expand into new products or markets without accessing their cash reserves. This type of financing addresses short- to medium-term needs, enabling businesses to cover essential expenses like stock, payroll, equipment and accounts payable. It can also assist businesses with accelerating the cash flow around their outstanding commercial invoices.

Commercial finance brokers play a vital role in helping businesses access working capital finance. These brokers facilitate various financing options to bridge gaps between cash inflows and outflows, especially during slow receivable periods or seasonal fluctuations. For commercial finance brokers, understanding the intricacies of working capital finance is crucial to advising business owners and financial decision-makers effectively.

When and how to access working capital finance

Working capital finance is primarily used by small-to-medium sized businesses across a wide range of industries, including retail, manufacturing, labour hire and healthcare services. These businesses often face cash flow challenges due to slow receivables, seasonal fluctuations, or the need to invest in greater inventory levels and more advanced equipment. Commercial finance brokers can identify and recommend the most suitable working capital finance solutions to meet their business client’s unique needs.

Dan Verdon, Octet’s NSW Director Working Capital Solutions, says that applying for working capital finance typically involves assessing the business’s cash flow needs and selecting the appropriate financing option. According to Dan, brokers support businesses in this process by evaluating their financial health, understanding the cash flow cycle, and recommending tailored funding solutions.

“For instance, a manufacturing company with a substantial accounts receivable might benefit from debtor finance, while a healthcare business importing medical consumables needing to pay overseas suppliers promptly will likely find trade finance more advantageous,” explains Dan.

Common types of working capital finance

Dan says it is important to understand the different types of working capital finance, how they work, and what’s best for the business’ situation.

“Navigating the various types of working capital is essential for optimising cash flow and ensuring supply chain management efficiency,” says Dan. “Understanding the best options for the business’ needs can enhance financial stability and provide a competitive edge.”

The various types of working capital finance include:

Debtor (Invoice) Finance: Access funds tied up in outstanding business invoices, providing immediate, personal security-free cash flow based on the accounts receivable.
Trade Finance: A revolving line of credit allowing businesses to pay their local and global suppliers quickly, improving cash flow and speed to market.
Term Loans & Asset Finance: Quick funding with fixed repayment schedules, ideal for immediate cash flow needs.
Trade Credit: Suppliers extend payment terms, allowing businesses to defer payments for goods and services, thereby managing cash flow more effectively.
Lines of Credit: Flexible access to funds up to a predetermined limit, allowing businesses to withdraw as needed.
Bank Overdraft: A short-term financing option that allows businesses to withdraw more money than is available in their account, up to an agreed limit.

The benefits of working capital finance

The benefits of working capital finance can be substantial. It improves cash flow, supports efficient operations, and enhances the business’s ability to seize growth opportunities. “By leveraging these financing options, businesses can maintain short-term stability and focus on long-term success, ensuring resilience and adaptability in a competitive market,” states Dan.

However, it is important to align the strategic implementation of supply chain financing with the requirements of the business. Some aspects to consider are:

Align financing with cash flow cycles: Ensure that the chosen finance solution matches the business’s cash flow patterns to avoid repayment stress.
Diversify financing sources: Utilise a combination of finance options to spread risk and maintain flexibility.
Monitor financial health: Regularly review the business’s financial performance and the total cost of any external finance facility to adjust strategies as needed.
Leverage relationships: Develop strong relationships with suppliers and financiers to negotiate better terms and rates

For commercial finance brokers, understanding and effectively communicating these aspects of working capital finance can have a significant, positive impact on the financial health and growth of their clients.

How to Calculate Working Capital

Understanding how to calculate working capital is fundamental for effective financial management. Working capital is the difference between a company’s current assets and current liabilities. The basic formula for calculating working capital is:

Working Capital = Current Assets – Current Liabilities

Current Assets	Cash and anything that can be converted into cash within a year, eg raw materials, accounts receivable, inventory, stocks, and bonds.
Current liabilities	Bills which are due to be paid within a year, eg accounts payable, payroll, tax, and overheads.

This formula provides a snapshot of a company’s short-term financial health and operational efficiency. Positive working capital indicates that a company can cover its short-term liabilities with its short-term assets, which is crucial for maintaining smooth operations and supporting business growth.

Octet Working capital solutions – powering business growth

Octet’s tailored working capital financing and payment facilities help businesses effectively manage their cash flow and facilitate sustainable growth. With Octet, businesses can:

access a flexible line of credit to power business trade
leverage unpaid invoices to access fast working capital
expand business operations with a flexible, tailored loan
use existing credit or debit cards to pay suppliers
streamline payments and take control of the supply chain.

We offer a comprehensive suite of financial solutions to empower businesses with the capital they need to thrive.

Debtor Finance

This solution helps manage cash flow by providing immediate access to up to 85% of unpaid business invoices, without the need for personal asset security.

Trade Finance

Set flexible supplier payment terms with up to 60 days interest-free and 120 days repayment, whilst enjoying bank-beating FX rates.

Term Loan

Flexible finance for a range of business needs including investment in new assets, consolidation of loans or equipment purchase.

Octet Pay

Use business credit cards or other payment sources to pay any invoice. Benefit from market-leading FX rates when paying international suppliers.

Supply Chain Accelerate

A fast and flexible solution that pays 100% of supplier invoices with up to 90 days to repay.

Supply Chain Management Platform

Our innovative digital platform makes it easy to track, validate and authorise across each stage of a transaction.

Discover how to partner with Octet today

Octet is committed to supporting businesses through tailored financial solutions, helping them understand their cash flow and funding options and ensuring they are well-positioned to seize growth opportunities. If you’re a business decision-maker and want to know more, get in touch with the team today.

Or if you are a commercial finance broker with clients who could benefit from smarter working capital solutions, our Referral Partner Program empowers businesses across a range of industries with innovative working capital solutions.

Speak to our team of working capital specialists today to discover how we can power business growth.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Global tensions impacting local supply chain management

Posted on April 17, 2024June 3, 2024 by Russell Walsh

When it comes to complex and interconnected global trade, robust supply chain management practices are increasingly important to ensure your business is operating as efficiently as possible. As your business navigates through current geopolitical turbulence and economic uncertainties, the importance of having strong supply chain strategies becomes even more important. These global issues need to be considered not only in the context of supply chain management, but also in terms of critical external funding and cash flow solutions including supply chain finance, trade finance and debtor or invoice finance.

Impact of recent geopolitical events: Iran Drone Strike on Israel

The recent Iran drone strikes on Israel have sent shockwaves across international borders, igniting concerns over heightened tensions in the Middle East. As geopolitical tensions escalate in this already volatile region, businesses worldwide are left to grapple with the potential repercussions on their supply chains and such critical items as oil, iron ore and other natural resources. With inflation and interest rate volatility still a key concern here in Australia and other countries, robust supply chain management will continue to be a vital tool for mitigating risks and ensuring operational resilience.

By integrating risk assessment practices into your businesses supply chain management, you can proactively identify vulnerabilities and implement contingency plans. From diversifying supplier networks in other regions (or locally where possible) to leveraging advanced technologies for real-time monitoring, you can help to protect your businesses supply chain against geopolitical disruptions. On face value most of these global events appear a literal world away, but the impacts often hit a lot closer to home on real world items such as fuel and shipping container costs.

Strategic importance of China ties in supply chain management

Navigating this scenario could become even more intricate due to China’s involvement. China appears to strive for a delicate equilibrium in its Middle East relations, maintaining robust connections with various stakeholders. Notably, its close ties with Iran have come to the forefront, with reports suggesting Chinese support for Iran’s actions against Israel.

China’s pivotal role in the global economy underpins the strategic importance of its trade relationships. As a leading manufacturing hub and a key player, particularly in Australia’s supply chain networks, China’s economic movements exert significant influence on our fortunes. The interconnectedness of supply chains means that any developments affecting China can reverberate across industries and continents.

For Australian businesses engaged in international trade, maintaining a resilient and diverse supply chain often means spending time understanding China’s economic policies, trade agreements, and geopolitical positioning. The often discussed ‘Chinese housing bubble’, long-term tensions with Taiwan and many other areas have the potential to materially impact the Australian economy, with SMEs particularly vulnerable.

By forging strategic partnerships and adopting agile supply chain management practices, businesses can navigate through uncertainties and capitalise on emerging opportunities in the Chinese market.

Adapting supply chains to global uncertainties

Amidst geopolitical upheavals and geopolitical rivalries, the question arises: How does this affect global and local supply chains? The interconnected nature of modern supply chains means that disruptions in one region can trigger cascading effects across the entire network. From transportation delays to trade restrictions, businesses must contend with a myriad of challenges in sustaining the flow of goods and services.

Effective supply chain management means taking a proactive approach to risk mitigation, encompassing scenario planning, supply chain mapping, and supplier diversification strategies. By fostering transparency and collaboration across supply chain partners, businesses can enhance their agility and resilience in the face of geopolitical uncertainties.

Navigating geopolitical risks: implications for Australian businesses

For Australian businesses, the evolving geopolitical landscape poses both challenges and opportunities. As a nation heavily reliant on international trade, Australia’s economic prosperity is directly linked to global supply chains. The ramifications of geopolitical events, such as the Iran drone strike and geopolitical tensions in the Asia-Pacific region, reverberate throughout Australia’s economy.

From the mining sector to the agricultural industry, Australian businesses must assess the geopolitical risks inherent in their supply chains and devise strategies to mitigate potential disruptions. One emerging trade partner outside of China is India. In 2023 Australia and India signed the historic India-Australia Economic Cooperation and Trade Agreement (IA-ECTA):

making Australian exports to India cheaper
opening up new import opportunities
creating a slew of new job prospects for Australian businesses

The IA-ECTA is but one avenue that your business can diversify its global trading partners, ensuring that global geopolitical risks such as those currently occurring in the Middle-East and from China through Asia Pacific have a minimal impact on the supply chain and ultimately cash flow and bottom-line profitability.

Easing cash flow challenges via smart working capital solutions

In times of supply chain disruptions caused by geopolitical events, your business will often encounter cash flow challenges due to delayed payments or interrupted production cycles. This is where working capital solutions such as trade finance and debtor finance play a crucial role in mitigating financial strain.

Trade finance provides a flexible line of credit to power your businesses international and domestic trade transactions. It helps you manage the complexities of buying and selling goods and services across borders by providing flexible finance solutions tailored to your needs. Trade finance ensures parties involved in the transaction can navigate issues like payment delays, currency fluctuations and credit risks, enabling smoother and more secure trade operations.

Similarly, debtor finance, also known as invoice financing or receivables finance, offers businesses immediate access to cash by leveraging their accounts receivable as collateral. In the event of delayed payments from customers due to supply chain disruptions, debtor finance provides businesses with the liquidity needed to maintain operations and seize growth opportunities.

By integrating working capital solutions into your business’s financial strategies, you can effectively manage cash flow fluctuations arising from geopolitical events, thereby enhancing resilience and enabling cash flow for long-term growth.

Detailed and strong supply chain management practices are critical for businesses seeking to navigate the complexities of global commerce amidst geopolitical uncertainties. By embracing innovative technologies, forging strategic partnerships, and adopting agile supply chain practices, businesses can enhance their resilience and thrive in an increasingly competitive and global economy.

Octet’s tailored working capital solutions have supported many businesses with supply chain finance strategies. Contact our team of experts today for more information on how we can help power your business.

Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Managing your healthcare supply chain

Posted on October 31, 2023May 20, 2024 by Russell Walsh

In the healthcare industry, where patient wellbeing is paramount and life-saving resources are critical, supply chain management is a crucial component of business success. However, healthcare supply chains have become increasingly complex and the events of the past few years have highlighted their vulnerabilities.

So, how do you build resilience in your healthcare supply chain? We explore the challenges to healthcare supply chain management while shedding light on the strategies, innovations and technologies driving sustainable change.

The challenges of healthcare supply chain management

A supply chain is a network of organisations, people and resources involved in producing, distributing and delivering goods or services. In healthcare, supply chain management includes many stakeholders, such as manufacturers, importers, suppliers, healthcare providers, regulatory bodies, government and private services and shipping and transport partners.

The vulnerabilities of supply chains worldwide were highlighted during the COVID-19 pandemic and health policymakers were left searching for quick and practical solutions. For health practitioners, the shortage of consumables, stock and equipment was frustrating and damaging to their business and potentially dangerous for staff and patients. The events of the past few years have highlighted why supply chain management is so important in healthcare organisations.

For Australian healthcare providers, it’s even more complex. Domestic availability of medical supplies in Australia is limited, which means the nation is at the end of a lengthy and complex chain for most of its supplies.

Tim Bowring, Octet’s Head of Sales, Health, has seen the effect on the ground. “For example, we went through a period from the end of the pandemic until very recently where if you ordered, say, a dental chair, it could take six months before it arrived in the country.

“We also saw items such as X-ray machines and specialist equipment to perform surgeries greatly impacted. It led to the largest suppliers having to open bigger warehouses, forecast demand for stock over a long period and then pre-order and store it all here on shore.”

How to build resilience in a health supply chain

While no healthcare provider or supplier can control global disruptions such as pandemics, diplomatic tensions and wars, there are many actions they can take to manage supply chain issues in healthcare and build resilience. Here are our top picks.

Utilising automation and data analytics

“Resilience often comes down to how you manage your stock,” says Tim. “So ordering the right amount of stock, being efficient in your stock usage and having accurate forecasting models for how much stock you’re going to need are all critical areas.”

That’s where data analytics comes in. Important information, such as how to streamline processes, reduce costs and minimise errors, can be obtained by collecting, interpreting and analysing data.

Robotic automation can help with packing orders, while sensors and cameras can be used for quality control. Warehouse management, logistics scheduling, data sharing, processing orders and returns can all be automated.

Focussing on stakeholder engagement

The most effective supply chain leaders align their goals with key stakeholders, encouraging collaboration to achieve the best outcomes and minimise costs. It’s also essential for those involved in healthcare supply chain management to align their business values (in areas including ESG, growth or customer service) with the supply outcomes (such as fulfilment and introduction of new products) to ensure success.

Undertaking risk and resiliency planning

While the pandemic put healthcare supply chains into reaction mode, supply chain managers are now considering longer-term strategies. They are prioritising building resiliency into their supply chains over cost savings by investing in systems to mitigate risk. These might include programs to plan for and respond to disruptions in the supply chain or building monitoring tools to track critical supplies.

Increasing visibility

The more visibility a health supply chain manager has, the easier it is to build resilience. Clear visibility using a system for tracking supplies, for example, helps highlight potential blockages and allows an organisation to get a more accurate picture of clinical and non-clinical supplies. Forming close relationships with both local and global suppliers and distributors also helps increase visibility and accountability.

Developing protocols for internal teams

Throughout the healthcare supply chain, it’s important for leaders to develop tools and enhance capabilities in their teams to increase crisis preparedness. A clear framework for managing supply chain challenges allows teams to more efficiently manage any blockages.

How Octet can help streamline healthcare cash flow

“For practitioners, if equipment breaks down and they can’t use it, that’s downtime in the practice,” Tim says. “The longer it takes to replace it, the greater the impact on the practice’s ability to treat patients and its revenue. It’s therefore vital that a supplier has access to extra stock at short notice. The large, multinational suppliers have the ability to bring stock onshore. But SME suppliers need more support.”

That’s why a reliable finance partner is a must for healthcare businesses. Working capital solutions can mitigate vulnerabilities and unlock opportunities in the global health supply chain.

“With Octet, you can increase your purchasing power and use that to negotiate early settlement discounts. You’ll be able to hold or order stock without needing your customers to pay upfront. We also give you the ability to offer your customers longer terms or repayment plans to make yourself more competitive.”

There are many options to strengthen your healthcare supply chain with Octet:

Enjoy up to 60 days interest-free and 120-day repayment terms with our Trade Finance facility. This convenient line of credit allows you to pay local and international suppliers securely and efficiently.
Access unpaid business invoices for a fast and efficient cash flow injection. We can help you convert up to 85% of outstanding invoices with our Debtor Finance facility — all without the need for personal asset security.
Streamline and track every stage of your supply chain process with our innovative Supply Chain Accelerate. This fast and flexible solution pays 100% of your supplier invoices instantly while you have up to 90 days to repay. That way your suppliers get paid while you enjoy an extension on your terms.

Strengthen your healthcare supply chain with Octet

Understanding your healthcare supply chain and applying strategies to strengthen and safeguard your network is critical for business success. You need a working capital and payments acceleration partner who can support sustainable business growth. Contact our team of healthcare finance specialists to find out what Octet can do to help power your healthcare business’s growth today.

Supply chain issues: trends and predictions for 2024 and beyond

Posted on October 24, 2023May 20, 2024 by Russell Walsh

There’s no doubt global supply chains continue to face a multitude of challenges that demand innovative solutions. As we head into 2024, continuing disruptions caused by the COVID-19 pandemic, ongoing global tensions, inflationary pressures, supply uncertainty and environmental concerns are all forcing companies to re-evaluate their traditional supply chain models.

So, what are the future supply chain issues facing Australian businesses and their global trading partners? We explore the complex challenges confronting supply chains into 2024 and beyond, and touch on strategies to help organisations adapt and thrive.

6 global supply chain issues and trends in 2024

Many global issues have highlighted the vulnerabilities in supply chains over the past few years, says Octet’s Supply Chain Finance Manager, Joe Donnachie. So, what are the major supply chain challenges and trends as we move into 2024 and beyond? Here are our top six.

1. More circular supply chains

Manufacturers continue to move towards a circular supply chain model as we enter 2024. Gartner reports that in 2023, 20% of tech hardware vendors’ products were associated with circular initiatives. By 2030, that figure will increase to 80%. As businesses in various industries look to re-use and re-manufacture end-of-life products, vendors in the tech hardware industry will be particularly aware of mitigating the environmental impact of their products.

Every business has a different focus on creating a more sustainable supply chain. For some, it’s about making packaging more sustainable. Others will concentrate on the product and incorporate recycled materials into their manufacturing processes. While some businesses will repair, refurbish and recycle their goods to increase product lifetimes.

“Consumer demands have definitely changed,” says Joe. “While inflationary pressures mean most people have less cash to spend on disposable goods, there’s a lot more focus on where the goods come from and the sustainability of those end products.”

2. Ongoing skills shortages

Those in the distribution industry continue to experience talent shortages, affecting production and service delivery. Companies are having to employ technology to help workers access systems easily and securely, while automating routine tasks and creating a positive work culture to attract and retain employees.

As the skills shortage and increasing labour costs continue to affect output, margins are being reduced, and businesses will have to look to AI, digital transactions, robotics and automation to remain competitive.

Joe says an increase in automation and digital documentation requires workers along the supply chain to adapt and gain new skills to incorporate this new technology into their work routines.

3. Increased consumer pressures

While traditional supply chains were a relationship between a business and its suppliers, a recent, more active addition has complicated that relationship — the consumer. According to Forbes, thanks to digitisation, consumers are now more aware of how products are made, where they come from, and other options available to them. This new relationship adds further complexity to supply chain management, and that will only increase in the future.

“There’s a lot more pressure from the consumer,” says Joe. “They’re substantially more conscious of the source of products. I see it in items such as clothing, food and alcohol. For example, there’s now a big shift towards low- or non-alcoholic drinks, and that industry has just boomed over the last three years. All driven by consumer demand and using social media and other tech-driven forums to amplify word of mouth.”

4. Rising inflation and economic instability

The Reserve Bank’s efforts to ease inflation through numerous steady rate hikes have led to economic uncertainty for consumers and a reduction in spending, which will no doubt continue into 2024. Adapting to a changing economy is vital for businesses to stay competitive in the years ahead. All businesses will need to be flexible and prepared to change their services, products and marketing plans to meet consumer demand.

It’s a pressure felt around the globe as other central banks’ efforts to tame inflation continue to dampen economic growth. The IMF reports the factors that could potentially hinder economic growth in the future include the risk of inflation staying high or rising further, the chance of further extreme weather events, China’s economic recovery slowing and an escalation in the Ukraine war, which could lead to even more restrictive economic policies.

The global financial pressures causing supply chain disruptions will not likely ease in 2024, particularly when we consider the current Israel/Palestine conflict in the Middle East.

5. Ongoing supplies shortages

From minerals to medicine, building supplies and grocery staples — supplies of materials around the world failed to meet consumer demand during COVID-19 and in the years that followed.

While the semiconductor supply to the automotive industry is finally improving, chip shortages could still affect manufacturers in 2024 as demand outstrips supply.

Closer to home, medicine shortages are still affecting Australians. The TGA reports that hundreds of medications are in ‘short supply’, with the nation’s pharmacists forced to offer substitutes to their customers.

6. Easing of shipping pressures

Shipping delays, bottlenecks, container shortages and Russia’s war on Ukraine have heavily affected shipping in the past few years, but the outlook is more positive for 2024. International Cargo Express predicts the industry will return to normal in 2024 with new capacity coming into the market, while carriers will balance their supply with new procedures, and ships will become more reliable. There will also be a steadying of freight rates.

DHL predicts a steadying of rates later in 2024, and reports that as new containers enter the market, the industry will enjoy more capacity and an improvement in the reliability of schedules.

Allianz reports the world’s container fleet grew by 6.3% in 2023 and will continue to grow by 8.1% in 2024. Considering congestion at ports is also easing, supply will likely rise.

How to overcome supply chain challenges

As we head into 2024, geopolitical uncertainty, economic pressures and ESG demands are forcing a rethink of conventional supply chain models, which will need to better balance sustainability, speed, responsiveness and cost. So what can businesses do to alleviate supply chain issues, protect their supplier relationships and ensure longevity?

Diversification

Relying on limited suppliers left businesses vulnerable in the years during and after COVID-19. “A solution is to diversify that risk to multiple supply chain sources, and that’s what has really happened over the last few years,” Joe says.

Diversifying a business’ supply base is, in theory, a great idea, but Joe warns it’s not as simple as it sounds. “It comes back to how dependent businesses are on a particular product or component coming into the country and whether or not they have the ability to, say, start setting up a workforce in another country, which obviously has its own tax implications and regulations. What is the competition in that area as well? These factors make it very challenging, but necessary, to diversify your supply chain.”

Analytics

All businesses should be looking to implement a digital supply chain that takes advantage of analytics and uses consumer data to inform decision-making. By aligning supply with real-time demand, businesses can ensure more products are delivered on time while offering exceptional customer service and minimising costs, such as warehousing and storage.

AI and Robotics

Forecasting has always played a role in supply chain management, as it enables businesses to plan for increases in demand, supply shortages and unforeseen events. Now, AI is allowing predictions to be made from massive amounts of data faster and more accurately than ever before. The pandemic showed just how important it is to plan for unexpected circumstances. AI has the potential to become an essential risk management tool.

As the world’s businesses continue to grapple with worker shortages and inflation, they are turning to automation and robotics. Prices of robotics are dropping, and when coupled with AI, can become a powerful and viable business tool.

Other technologies

New technologies are being embraced along the supply chain. 3D printing is allowing businesses to print parts or whole products and reduce reliance on overseas suppliers or vulnerable supply chains. Blockchain solutions are also providing increased accountability and responsiveness along complicated networks. Blockchain technology could centralise and streamline processes in an industry such as shipping, which requires considerable documentation and complex procedures.

Maximise your supply chain performance with Octet

Octet’s supply chain finance solutions power your business to thrive, no matter what supply chain issues you’re facing. With our secure supply chain platform, you can use your credit or debit cards to ride fluctuations in commodity prices and exchange rates and make cross-border payments easily.

With our Debtor Finance facility, you can access up to 85% of your unpaid invoices to boost cash flow in your business and capitalise on opportunities. Need to increase your purchasing power? Our Trade Finance facility is a convenient line of credit that allows you to pay both local and global suppliers with up to 60 days interest-free and 120-day repayment terms. Contact our team of working capital specialists to discover how Octet can help accelerate your cash flow and improve supply chain dynamics today.

Agriculture finance: embrace opportunity and overcome uncertainty in your agribusiness

Posted on September 18, 2023May 20, 2024 by Russell Walsh

With the breaking of the three-year east-coast drought in 2020, many agricultural regions shifted from poor to good conditions in a single season – and years of record-breaking production have followed.

However, the challenges and uncertainties for agribusinesses remain, and climate variability isn’t the only thing Australian primary producers, and the businesses that support them, need to manage. In this volatile and unpredictable environment, the right agricultural finance is vital for agribusinesses to manage the numerous challenges and thrive.

Here, we examine the key obstacles facing Australian agriculture and explore the agriculture finance options that can best support agribusinesses into the years ahead.

Agribusiness finance: the unique needs of Australian agribusinesses

Australian agricultural activity covers 427 million hectares of land, which equates to more than half of Australian land use. The sector accounts for 11.6% of goods and services exports, and the most recent data suggests it employs about 239,000 people nationally.

It’s an extraordinarily diverse industry that plays an important role in the broader Australian economy – and those operating in the sector face a unique set of challenges.

Agriculture is an inherently seasonal industry. It’s also vulnerable to risks ranging from the weather to supply chain disruptions and natural disasters. There can be high upfront and ongoing costs for insurance and maintenance, as well as long investment cycles.

We spoke with Octet’s Supply Chain Finance Manager, Joe Donnachie, to gain a deeper understanding of the key agriculture industry challenges.

Joe describes the challenges as “incredibly complex and multifaceted. Australia has recently gone from fires to floods and back again. We’ve had population change, volatile food prices and record price peaks. Then you’ve also got shifting dietary demands, which plays directly into the agri space.”

Something that has also significantly impacted agribusinesses in recent times is staffing issues. “Australia’s closed borders during COVID meant that the regular stream of backpackers couldn’t emigrate, and particularly in the Northern Territory and Far North Queensland, they simply didn’t have enough workers to properly staff farming operations.”

In addition, farm loan interest rates in Australia have obviously been rising, and inflationary pressures and tariffs have been wreaking havoc.

“In 2020, China imposed tariffs on Australian barley and a range of other agricultural commodities,” Joe says. “That alone wiped out around $1.2 billion worth of trade a year. In August 2023, the barley tariff was lifted. However, wine, seafood and red meat are all still subject to those restrictions.”

An intelligent supply chain finance partner can add some certainty to the equation in these highly variable and volatile conditions. “It can give a degree of certainty for an agribusiness when it comes to managing cash flow. A tailored working capital facility can assist with the uncertainty and ensure there is sufficient funding to tackle cash flow issues and take advantage of growth opportunities when they arise,” Joe explains.

Agriculture loans: the limitations of traditional finance

Banks were traditionally the first consideration for agribusiness lending, with an overdraft providing a general line of credit.

Traditional bank lending can come with several limitations, however, including:

Speed: Banks often have slow loan approval processes, meaning you could miss out on time-sensitive business opportunities due to delayed funding.
Restrictions: Traditional bank loans can come with restrictive covenants and fixed limits on funding. These limitations might not align with the dynamic nature of your business, especially in a rapidly changing sector like agribusiness.
Security: Banks typically require specific forms of collateral, which might not fit well with the unique structure of your business. This can be particularly relevant for agribusinesses with complex ownership arrangements.
Technology: Many traditional banks lack user-friendly and streamlined digital platforms for financial interactions. In contrast, non-bank lenders often provide innovative technology solutions that better suit a business’ supply chain needs.

Joe also explains that the challenges most agribusinesses face “make consistent profits year in year out unlikely, and annual profits difficult to forecast”. This can then act as a barrier when applying for traditional bank finance.

Better finance solutions for agribusinesses

These days, innovative finance products and non-bank lenders are available to help agribusinesses both survive and thrive. Octet provides a range of working capital solutions to power Australian agribusinesses, including:

Trade Finance: This solution is a great way to bolster your business’ purchasing power, with a revolving line of credit, allowing up to 60 days interest free and 120-day repayment terms.
Debtor Finance: This facility enables you to access unpaid business invoices as an immediate cash injection quickly and efficiently. Octet can help you convert up to 85% of invoices to immediately boost cash flow.
OctetPay: This allows you to use your credit or debit cards to pay any supplier invoice to an extensive list of countries and currencies. Access market-leading FX rates, Octet’s supply chain technology, plus standard credit card rewards points with this intelligent solution.

When exploring an agriculture finance solution, Joe recommends simply choosing a product that best suits your business. “Don’t be pigeonholed into one product if it’s not suitable – especially where a lender has only one type of facility available. Understand the working capital requirements and the total cost of the facility. Make sure that when it boils down to marginal cash flow, that the facility works for you, and is commercially viable.”

Case study: Trade Finance solutions for a grain trader

One of Octet’s loyal clients, a prominent grain trader, had the opportunity to procure substantially more stock. The business had existing bank loans, however, to obtain another line of credit to purchase the additional grain, their bank would take about six months to provide an answer. Given the cyclical nature of the business, that just didn’t work.

So they discovered Octet, who, in a matter of weeks, provided a $2 million Trade Finance line of credit that didn’t impede upon the client’s existing bank facility. The business used the funds to efficiently pay their grain suppliers and local transport companies that moved the grain.

Weather the storms and make hay with Octet while the sun shines

Your agribusiness needs a strong and flexible finance partner to grow and flourish. Explore Octet’s range of working capital solutions to find the right product for your fast-growing operation. Contact our team of supply chain finance specialists today.

International business payments: tailored solutions for your business

Posted on September 13, 2023May 20, 2024 by Russell Walsh

Australian business owners, leaders and entrepreneurs who transact internationally continue to face challenges due to the limitations associated with traditional finance facilities and credit card usage. However, OctetPay is redefining the landscape in an effort to make international business payments more efficient – so established and growing Australian businesses can thrive in the expanding global marketplace.

We spoke to Octet’s Head of Marketing, Duncan Khoury, about the future of business foreign exchange and payments.

A fresh option: seamless international money transfers for businesses

There are approximately 2.4 million businesses in Australia, and many of those trade and transact internationally. Add to that the fact that our nation’s local enterprises have a total foreign business currency exposure of $2.39 billion, and it’s clear business foreign exchange services are needed now more than ever before.

With US giant Amex recently announcing the decommissioning of its FX payments product outside of the United States, many businesses have been forced to seek new and reliable ways to seamlessly pay both their international and domestic suppliers.

“There are potentially hundreds of thousands of Australian businesses being impacted here,” Duncan says of the Amex move. This is where Octet has emerged as a supplier payments game-changer. The OctetPay service provides businesses with a transparent supply chain platform for swift and secure cross-border payments.

FX for business: OctetPay is the solution

OctetPay is breaking new ground in the international business payment sector by streamlining transactions and overcoming cross-border payment issues. Using an intelligent supply chain platform, OctetPay enables users to transact with confidence.

Duncan says there are two broad types of business payment requirements: domestic and international, and OctetPay can manage both.

“A lot of the providers out there are centred more around domestic payments. OctetPay has two key points of differentiation. One is that it is more geared towards being a fast and efficient international payment product, and two, is the nature of the supply chain platform itself. Once you have onboarded your suppliers onto the platform, and you start transacting with them, it’s seamless, secure and fast.”

So, what are the other benefits of choosing OctetPay?

Registration is easy: To register with OctetPay, all you need is a company ABN, bank account confirmation and your current Australian driver licence.
Straightforward and streamlined: Octet’s platform is compatible with major card brands, including Visa, MasterCard and Amex, so that you can make payments using your chosen credit and bank debit cards. As an added bonus, you can still earn rewards points or cashback rewards whilst paying regular supplier invoices.
Ideal FX for business: Octet is able to pay suppliers in 68 countries, using up to 15 currencies including USD, EUR, GBP, JPY and NZD. Your card information is at the ready, regardless of the time of day. You choose the funding split and currency pair, and in one simple click, lock in your ideal foreign exchange rate. Who doesn’t like price predictability?
Security: OctetPay integrates seamlessly with our supply chain platform for added trading partner payment security.

Octet makes business easier

To create a streamlined and user-friendly experience, Octet’s other working capital solutions can work cohesively with OctetPay in order to help your business thrive in a competitive market.

Octet’s debtor finance solution is an efficient tool in enabling you to access unpaid business invoices as an immediate cash injection. In fact, we can help you convert up to 85% of invoices to immediately boost cash flow.

Also worth consideration is our trade finance facility. It’s a great way to bolster your business’ purchasing power, with a revolving line of credit, allowing up to 60 days interest free and 120-day repayment terms.

Power your growing business

Business money transfers and supplier payments have never been so easy. OctetPay gives you the power to pay, no matter where in the world your suppliers are located. Speak to our team of working capital and payments experts, or register online today.

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