working capital Archives | Page 2 of 3

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.

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.

Non-bank lenders: the future of business funding is here now

Posted on June 5, 2023May 20, 2024 by Russell Walsh

Today’s businesses need flexible and fast funding options that support growth and allow them to take advantage of opportunities. Unfortunately, these are solutions that traditional lenders — like banks — can’t always provide.

Non-bank lending options are becoming an increasingly attractive option for Australian businesses due to their flexibility, visibility and speed. Discover what’s possible outside traditional banking and why businesses are looking towards intelligent finance partners like Octet.

The lowdown on non-bank lenders

There was once a time when banks were the only financial institution businesses considered for lending. And the most common solution was a bank overdraft to give them a line of credit. Although effective in some instances, it was a slow process and typically secured against the business or the director’s personal property.

Today, some non-bank lenders in Australia offer a trade finance facility as a holistic, flexible alternative. The benefits of this include:

the ability to have an unsecured facility, whilst setting your own supplier trading terms with up to 60 days interest free and 120-day repayment terms
the buyer and supplier both having visibility of all transactions
the fact that it acts as an all-encompassing supply chain procurement solution

Most importantly, though, businesses don’t have to realign their supply chain strategy to fit with the finance offering, as non-bank lenders offer products that complement and help to grow existing strategies.

Octet’s Supply Chain Finance Manager, Joe Donnachie, explains how trade finance solutions for businesses are growing in popularity.

“Trade finance acts as a perfect supplementary solution,” he says. “It can be when the bank’s funding is restricted, or when there are seasonal purchases, or even when the business is growing at a rate where having additional working capital is critical to allow that growth.”

Are you seeking a more tailored business finance solution? You’re not alone.

Australian businesses turning away from banks

Leading research group RFI Global partnered with Octet to survey Australian businesses about their financial plans. The results revealed an increase in businesses searching for financing solutions outside traditional banks.

The Australian businesses surveyed stated their intentions to use more non-bank lending options in the future, including trade finance, export financing, import financing, invoice factoring and invoice discounting.

Octet’s Co-CEO, Brett Isenberg, explains. “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. This is to help navigate the current and upcoming economic turbulence.”

Businesses of all sizes also reported less reliance on traditional business credit cards. Likewise, those with a turnover of $140 million+ were 45 per cent more likely to use a business operating account or trade finance product to fulfil transactional funding needs.

The limitations of bank lending

Why are more businesses turning away from banks and looking towards non-bank commercial lenders? Joe offers several reasons.

Speed to market. Decisions must be made quickly and confidently to accelerate growth and keep up with the competition. “Banks take longer to get their ducks in a row,” he says. “Businesses can miss out on opportunities waiting for funding to become available.”
Restrictions. “With quite limiting covenants at times, there’s a whole raft of restrictions in place when banks are lending to a business,” says Joe. Likewise, there is often a fixed limit on funding available from banks. “Whether funding is restricted from breached covenants or the bank’s risk appetite changing, the client is usually the last to find out, and they suffer as a result.”
Security. Banks offering secured loans don’t always consider the unique structure of each business. “Traditionally, a bank might want either a registered GSA over the business itself or a director’s asset as security,” Joe explains. However, in cases of unequal shareholding, this can cause issues in the company.
Platforms and technology. Today’s businesses need innovative digital solutions for their finances. “Banks often have cumbersome platforms that aren’t always user-friendly, instead of streamlined procurement technology designed specifically for business supply chains, including interactions between their local and global suppliers.”

Banks no longer working for your business? Think outside the box

Are you considering embracing more innovative finance solutions for your business? Joe advises companies making the switch to a non-bank lender to be prepared before they do.

“Speedier funding and more efficient solutions are all possible,” he says. “But businesses need to have the relevant financial information available, provide reconciled accounts and have various internal processes locked down.”

He also suggests that businesses establish whether a non-bank lender fits them well. “Ask for a platform demonstration to see if it works for your business. Bring the accounts team into the fold. As the ones utilising the facility day to day, it also needs to be a good fit for them.”

Octet offers a range of finance solutions for businesses wanting to move away from more traditional commercial lenders. Our trade finance facility provides flexible and fast credit for businesses of all sizes, whilst some entities might require a debtor finance solution to unlock the potential in their accounts receivable. Using Octet’s Digital Wallet, you can also leverage existing funding sources to pay local and global suppliers through a single, secure online platform.

Non-bank lenders: the future of business funding

Octet partners with fast-growing Australian businesses to tailor finance solutions that work for them. Ready to grow on your own terms? Speak to us about the options — including trade and debtor finance — that make sustainable growth possible.

Beyond business credit cards: the future of supply chain finance solutions and digital wallets

Posted on May 25, 2023May 20, 2024 by Russell Walsh

The credit card has long been a financial staple for many businesses. Whether used to stock up on stationery and other supplies, pay for ad hoc services or entertain clients, it’s a reliable and fast source of funds.

For all the advantages business credit cards offer, they also have limitations. And as many Australian businesses now look towards other forms of credit — like trade finance products and more holistic digital wallets — these limitations become even more apparent.

We spoke to Octet’s Head of Marketing, Duncan Khoury, about the future of the business credit card and why digital wallets and tailored working capital solutions are poised to become the norm for today’s companies.

The current landscape of business credit cards

As one of the earliest personal finance solutions, credit cards have a long history of providing fast and straightforward access to money. But it wasn’t until the 1970s that businesses started seeing their value too. After realising the credit card’s potential, the corporate credit card for company expenses was born.

“The business credit card was commonly used for menial things, like weekly office shopping or buying stationery,” Duncan explains. “Today, small-to medium-sized businesses can use them for more meaningful expenses, like monthly advertising on channels such as Google and Meta.”

While they remain an intelligent solution for business purchasing of this nature, business credit cards have limitations. Let’s explore some pros and cons.

The pros:

cost-effective, if paying the account on time
allow purchases to be traceable
maintain control over business equity
unlike other lines of credit, there is generally no security needed
earn rewards points for your business through purchases

The cons:

potentially damage personal/cardholder credit rating
higher interest rates than other forms of credit
possible merging of business with personal expenses in smaller businesses
insufficient funding lines for larger purchases

Today’s complex and agile businesses need more than simple credit cards. They require simplified, consolidated access to finance that allows them to make substantial purchases along their supply chain. So, what’s the solution?

Seeking a better solution

If your business is considering moving away from physical credit cards in favour of more holistic working capital solutions, then you’re not alone.

Working with Octet, leading research group RFI found Australian businesses today were less likely to use credit cards than other forms of credit. Companies with a turnover of between $10 million and $700 million were more likely to use a business operating account or trade finance product instead.

“The gap was also particularly substantial where businesses had some revenue from online channels and digital sales,” says Duncan.

Digital wallets have become an increasingly popular finance product for businesses, with an ability to fill the gaps that credit cards can’t. But what do they do exactly? Duncan explains.

“A digital wallet is a financial transaction application that runs on any device. It connects both your own and external payment sources such as supply chain finance facilities, allowing you to make transactions and track payment histories — all in one digital location.”

It’s no surprise that digital wallets are the answer for many businesses seeking efficient and less restricted finance solutions.

The Octet digital wallet difference

Octet’s digital wallet is a default offering within our supply chain management platform. As such, all trade finance and receivables finance customers can access it.

“Octet working capital solutions are built around the supply chain, including our digital wallet,” says Duncan. “The key features and benefits have been tailored for the cyclical nature of business conditions, and can be tailored to your specific business and supply chain requirements.”

The Octet digital wallet gives you oversight of all cash coming in and out of your connected business accounts, leveraging your finance solutions with a simple and consolidated approach.

“Businesses can pay with existing funding sources, including credit and debit cards. It also allows you to bring your own FX contracts and plug them straight in, so you can continue using your current exchange rate with certainty.”

Importantly, Octet provides a secure online environment for its customers. With certified information systems and verifications at every step, businesses can feel safe using Octet’s platform. We verify all trade partners with processes including anti-money laundering, counter-terrorism financing and know your customer, so there’s less risk for all parties.

Octet’s digital wallet — and other working capital solutions — give businesses a modern, simplified and bespoke approach to their finances.

Simplify your finances with Octet

A business can only operate as effectively as its finance solutions and cash flow position allow. Speak to Octet about the difference a digital wallet, including tailored supply chain finance can make for your business.

Working capital solutions for successful business growth

Posted on March 23, 2023May 20, 2024 by Russell Walsh

Your business is strong. Demand is growing. You’re ready to take your company into its next phase. But how do you make the transition successfully?

Moving through various phases of business growth can be a rewarding – and challenging – time. When risks and opportunities are abundant, you need the right finance partner to ensure success. Our key recommendation? Look for flexible finance solutions to ensure your business can quickly capitalise on new opportunities.

What is business growth?

Ask any business owner about their goals, and the answer will inevitably relate to growth. Whether it’s a vertical expansion (like venturing into related products and services) or horizontal diversification (such as bringing a traditional brick-and-mortar retailer into the ecommerce space), there are many ways a company can grow.

But these periods of change come with uncertainty, particularly around financials.

Brett Isenberg, Co-CEO of Octet, believes the most critical time for a business to be on top of its finances is during a growth phase.

“It’s critical for all key staff and departments, not just the finance team, to understand and value the numbers,” he says. “This is especially true for high-growth businesses where there are both significant risks of failure and significant opportunities.”

How to promote business growth

So, what do you need to ensure your business growth phase is successful? While every business is different, successful growth usually requires an appropriate and sustainable funding or working capital base, especially during the early stages. But obtaining funding is also one of the biggest challenges.

For businesses planning a growth phase, it’s important to look for flexible, secure and sustainable funding options.

Smooth business growth is possible with tailor-made working capital solutions such as debtor finance and trade finance.

When researching the best finance solution for your growing business, Brett recommends looking for products that are “designed to cater for common fluctuations in business supply chains”.

“For example, our debtor finance facility grows and flexes with a business’s sales volume and enables further growth, giving you early access to a large percentage of your accounts receivables,” he says.

Octet’s recent, successful partnerships with leading Australian businesses, including Builders Steel Direct and Vinomofo, demonstrate the possibilities. Using our supply chain finance solutions, these companies were able to grow to meet demands and seize critical opportunities when they arose.

“Many of our clients and members are rapidly growing businesses that have only been operating for less than ten years,” Brett says. “These are businesses that have demonstrated remarkable growth through their product, marketing and overall business strategy.”

Why fast-growing businesses partner with Octet

Traditional finance solutions (provided by banks) and government initiatives like the Australian Business Growth Fund may appeal to companies entering a growth phase, but these avenues often come with burdensome conditions and lengthy approval processes.

In contrast, Octet delivers flexible products and specialised support for high growth periods. Partnering with us offers advantages that business growth funds and other finance providers rarely deliver, including:

Tailored supply chain finance solutions. “Our unique supply chain finance management platform and technology gives better financial visibility, supplier transparency, and added security,” Brett says. These factors are especially crucial during higher business growth phases and for international transactions.
Flexible lines of credit and criteria. “Octet determines funding limits by better understanding the business’s balance sheet and financial strength – including any growth plans,” Brett says. We offer flexible lines of credit that grow with your business, and can combine Trade and Debtor Finance funding limits to meet increased customer demand.
Streamlined processes and dedicated service. We give businesses the tools and confidence to grow while providing dedicated service and support. As the key elements of your supply chain network connect through Octet’s platform, processes become streamlined and more efficient. This technology is then backed by our experienced team of supply chain finance specialists.

Brett urges business owners to explore all finance options – even the unfamiliar ones – before entering a planned growth stage.

“The reluctance to pursue non-bank debt financing is sometimes borne of a fear of the unknown and the multitude of finance options available,” he says. “Speak with your industry peers, a finance consultant or your business’s accountant to look at the pros and cons of every solution.”

Giving you the power to grow

Octet’s working capital solutions can help your business to accelerate growth and seize opportunities as they arise. Contact our team today for a tailored working capital approach to achieving your business goals.

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.

The future of financing in Australia’s food and beverage industry

Posted on January 25, 2023October 22, 2025 by Russell Walsh

Australia’s food and beverage industry — our largest manufacturing sector — contributes 32% of total manufacturing turnover and employs more than 270,000 people. From meat and grains to dairy, beverages and confectionery, these businesses form the backbone of regional and metropolitan economies. Yet despite its scale and importance, the industry is navigating rapid change.

The coming years will see new trends in the food and beverage industry, from digitalisation and sustainability to shifting consumer expectations and ongoing financial pressures. For small and medium enterprises (SMEs), understanding these shifts — and how working capital finance can support growth — is key to long-term success.

The State of the Industry: Opportunities and Challenges

While demand for essential food and beverages will always exist, businesses are grappling with the lingering effects of the pandemic, geopolitical tension, climate impacts and inflation. Among the biggest challenges are:

Supply chain disruptions — delays and higher freight costs are forcing manufacturers to diversify suppliers and explore circular supply chains.
Skills shortages — nearly half of food service businesses report difficulty finding staff, leading to reduced hours and lost revenue opportunities.
Currency and commodity fluctuations — a weaker Australian Dollar and rising input costs continue to squeeze profit margins.
Climate change — floods, droughts and sustainability expectations are driving investment in greener practices and packaging innovation.
Shifting consumer behaviour — Australians are prioritising value, health and sustainability in their purchasing decisions.

Despite these pressures, the industry remains resilient. Globally, it grew by almost 9% in 2022, and locally it’s forecast to become a $250 billion powerhouse by 2030. The key for Australian food and beverage businesses lies in smart adaptation — and strong cash flow management to fund it.

Key Trends Shaping the Industry

Digitalisation and automation
Food manufacturers are embracing automation, AI and analytics to improve productivity, traceability and reduce waste. Investment in technology helps cut costs while enhancing competitiveness — a crucial move for Australian businesses competing with imports.
Conscious consumption
Sustainability is now a purchasing driver. Consumers want local, low-waste and ethically sourced products. Many brands are responding with recyclable packaging and transparency in their supply chains.
Health-driven demand
Consumers are increasingly health-conscious, fuelling growth in plant-based foods, low-sugar alternatives and non-alcoholic beverages — now a $10 billion global market projected to grow 8% by 2025.
Inflation and cost pressures
Rising input costs for fresh produce, energy and transport continue to challenge operators, particularly small producers. Maintaining profitability requires innovation, flexibility and access to fast funding.
Supply chain resilience
Businesses are experimenting with alternative ingredients, diversifying suppliers, and investing in digital tools to gain visibility and agility — a critical step in maintaining consistent output amid global uncertainty.

Why Financial Flexibility Matters

The ability to respond quickly to shifting conditions is now a competitive advantage. Many SMEs in the food and beverage industry face delayed customer payments, unpredictable expenses and increasing operating costs — making access to working capital finance more essential than ever.

Strong cash flow management allows you to:

Reinforce your supply chain — take advantage of early payment discounts or bulk-buy stock to avoid shortages.
Ride out market fluctuations — maintain liquidity to handle currency or pricing volatility.
Adapt and grow — invest in automation, sustainability initiatives or new product lines to meet changing consumer trends.

Financing Solutions for Food and Beverage Businesses

Octet offers several intelligent finance options tailored to the food and beverage sector:

Debtor Finance: Access up to 85% of the value of your unpaid invoices within 24 hours. This provides fast cash flow to cover expenses, reinvest in growth or mitigate payment delays. Beverage company Saintly used this solution to scale its brand while smoothing out cash flow fluctuations.
Trade Finance: Gain a revolving line of credit to pay local or international suppliers upfront — with up to 60 days interest-free and 120-day repayment terms. This flexibility helps strengthen supplier relationships and manage seasonal peaks.
Supply Chain Accelerate: An unsecured, off-balance sheet funding option that pays your suppliers in full while giving you up to 90 days to repay. Ideal for more sophisticated food manufacturers seeking capital efficiency.

These facilities help Australian businesses unlock the funds tied up in their supply chains — ensuring financial strength even amid uncertainty.

Building a Resilient Future

The future of finance in the food and beverage industry lies in agility, digital innovation and sustainability. By understanding the latest trends in the food and beverage industry and implementing proactive cash flow management, SMEs can stay ahead of market changes.

With the right working capital finance, your business can secure supply chains, manage risk and seize opportunities in one of Australia’s most dynamic sectors.

Powering the food and beverage industry

Octet provides solutions for all of your supply chain business finance requirements in one central location. We can help you better manage your cash flow, grow your business and leverage both global and local opportunities.

Get in touch today to discover which options will best suit 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.

5 key challenges in the pharmaceutical industry in 2023

Posted on January 15, 2023May 20, 2024 by Russell Walsh

The Australian pharmaceutical industry has certainly had its challenges in the past year. The ongoing effects of the global pandemic have continued to put pressure on the industry, while rising inflation, geopolitical instability and a shift in workforce behaviours have added to the already burdened sector.

Amid this growing list of challenges, pharmaceutical companies are looking for ways to build business resilience so they can continue to develop lifesaving solutions for patients both locally and around the world.

As we kickstart 2023, let’s take a look at the biggest challenges in the Australian pharmaceutical industry.

Challenge 1 — The skills shortage

The worldwide skills shortage is hitting businesses hard, with 31% of organisations in Australia struggling to find suitably skilled staff in 2022. In the pharmaceutical industry, there has been a surge in demand for STEM-related roles, but reports show the current talent pool is 14% less than demand.

Adding to this challenge is the shift in the way we work. The rise of remote working has caused a spike in employee expectations, with more people opting for organisations that offer flexible working arrangements, hybrid set-ups and remote opportunities.

Organisations are increasingly looking for ways to attract and retain skilled talent and are focusing on reskilling, upskilling and automation to solve one of the biggest challenges facing the pharmaceutical industry today.

Challenge 2 — Clinical trials playing catch up

For pharmaceutical companies running clinical trials for anything other than COVID-19 vaccines, the pandemic caused huge interruptions. And although the primary effects of the pandemic are receding, we’re still feeling the impact as we move into 2023.

Because new drug approvals depend on successful trials, this has meant the loss of a staggering amount of research, drug development and funding. As a result, both the industry and those who fund it have suffered financially, and many are still playing catch-up in their trial programs.

Companies in the pharmaceutical industry are now looking to technologies such as AI and virtual platforms to either restart or recreate trials with less face-to-face interaction. However, this new technology comes at a cost — significantly lowering or even erasing profit margins.

Challenge 3 — Supply chain disruptions

Although the pharmaceutical industry has historically been protected from supply chain disruptions because of high inventory levels, there have been widespread supply chain pressures across almost every sector, particularly over the past year.

ABS data from June 2022 shows that more than two in five businesses (41%) have faced supply chain disruptions, and the Australian pharmaceutical industry was no exception.

There continues to be a strong reliance on raw materials from abroad, with pharmaceutical companies relying heavily on imports from China while also looking to India for generic drug production.

According to the US Food and Drug Administration’s Center for Drug Evaluation and Research, China and India combined account for 31% of FDA-registered facilities around the globe. This heavily dependent supply chain continues to be one of the major challenges facing the pharmaceutical industry, with the drug shortages that peaked during the pandemic being more than likely to continue into 2023.

Many pharma companies are looking to supply chain innovations and circular supply chain models to tackle these challenges and build business resilience. Examples include establishing robust supply chain relationships and networks to better take advantage of market demand and moving to dual or multi-sourcing models backed by intelligent supply chain technology.

Challenge 4 — Cultural focus on prevention, rather than treatment

For humans in general, the cultural shift towards preventing rather than curing many diseases is great news. However, for the pharmaceutical industry, it means a serious drop in funding — both government and otherwise.

As new developments in ‘lifestyle cures’ such as elimination diets, improved sleeping conditions and increasing physical activity become commonplace, consumers are moving away from medication as the primary treatment for disease. With this trend comes lower medication turnover and more roadblocks to securing desperately needed funding.

Challenge 5 — Developing new cures for presently incurable diseases

Identifying cures for presently incurable diseases, such as cancer, Alzheimer’s and epilepsy, is a challenge that the pharmaceutical industry has always faced. Quick solutions are rare, and research and development is a long game.

Here in Australia, the Albanese Government is boosting stem cell research by offering $25 million in grants. This is part of a $150 million commitment over nine years, showing just how big a drive is needed in this area.

But developing new and innovative treatments requires continual and substantial investment. Without it, the goal of discovering cures that work well enough to earn strict regulatory approvals will be difficult to achieve.

Power your business growth with Octet

Although these challenges vary significantly in their origins, the solution to them is often to strengthen business cash flow. Exploring healthcare finance solutions could make a difference in addressing and overcoming all of these hurdles. Access to strong, diverse and reliable sources of cash flow can be a make or break for pharmaceutical companies.

Octet has a range of solutions to help your pharmaceutical business meet the current challenges and grow in 2023 and beyond. That way you can remain focused on serving your customers, not worrying about cash flow. These solutions include:

Our Trade Finance facility, a flexible line of credit that you can use to pay your suppliers earlier at home and around the world, with up to 60 days interest free and 120-day repayment terms
Debtor Finance, which allows you to convert up to 85% of your unpaid invoices into funding within 24 hours
Supply Chain Accelerate, an unsecured, off balance sheet source of funding, which settles 100% of your supplier invoices upfront, while you can repay 30, 60 or 90 days later

Our team of working capital specialists has helped business owners around the country overcome financial challenges, explore new avenues for success and achieve sustainable business growth. Talk to us today about which finance solution is right for your fast-growing pharmaceutical company.

Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgement. 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 judgement as at the date of publication and are subject to change without notice.

What are the best methods of financing a business in 2023 and beyond?

Posted on November 17, 2022May 20, 2024 by Russell Walsh

As a business owner or director, there will be times when you need to access finance for your business.

You might need finance to grow, to buy stock or to see you through difficult times. But which method of business finance is right for your organisation? In this article, we explore some of the general challenges facing businesses, the traditional methods of business finance and some alternative financing solutions.

Why you need business finance

According to the Australian Government’s business.gov.au website, fluctuations in cash flow can have a serious effect on a business’s viability. As a result, one of the most common reasons a business seeks financial assistance is due to cash flow. But there are many other reasons why a business owner might seek funding. You might need business financing:

to help establish a new business
to purchase or lease property such as a factory or store
to expand a business or begin engaging in international trade
to purchase stock
for investment in vehicles, machinery or other tools and equipment
for research and development
during times of difficulty to help the business survive

New challenges in business finance

The global pandemic and its aftermath wreaked havoc on the world’s businesses, but when we finally emerged from COVID, business leaders and owners faced new challenges.

The smallest SMEs to the largest multinational companies felt the impact of global supply chain issues, increased costs, skilled worker shortages and ongoing global uncertainty. Record levels of inflation and rising interest rates put pressure on households, consumers and business owners alike.

According to a recent KMPG report, business leaders have also been left with concerns about staff acquisition and retention, cybersecurity and digital transformation, the disruption of remote workplaces as well as new technologies. If businesses are to survive in the future, they simply have to innovate.

There is no doubt that the way we do business has changed, and that includes finding new ways to access business finance. The good news is there are a variety of methods available to finance your business. Options range from the traditional, like loans and overdrafts, to the more flexible, like Debtor Finance and Trade Finance.

You’re probably familiar with the traditional funding options, but the more innovative types may actually suit your business better.

Let’s examine the various finance options available.

Traditional methods of financing a business

The Reserve Bank of Australia reports that since the second half of 2021, small and medium businesses have experienced relatively strong growth conditions. As a result, demand is high for business finance. But though demand is strong, businesses face many hurdles, including rising interest rates. This makes accessing traditional bank funding difficult.

So, how do you finance a business? Many business owners still default to familiar, conventional options when they need financing, and there are three basic ways to go about it. It can be achieved by:

using internal funds
organising debt finance
arranging equity finance

Each of these options has benefits and drawbacks. Let’s take a look at each.

Business Financing Method #1 — Internal Funds

As a business owner, you might prefer to fund your expenses and growth through internal funds, such as the cash and savings you already have sitting in your business. These internal funds might come from profits you’ve already enjoyed or by selling assets the business no longer needs. The main advantage of using internal business funds is that you don’t have to take on debt or repay any money to a third party.

However, internal funding or internal financing uses up your company’s available cash or assets, which may cause cash-flow problems later on when it’s time to pay expenses. It may also stifle your business’s growth by keeping you from taking advantage of opportunities that require readily available funds.

Business Financing Method #2 — Debt Finance

Financing your business through debt involves borrowing money from a lender, such as a bank or other financial institution. It most often takes the form of credit cards, overdrafts, lines of credit or loans.

On the plus side, this generally allows you to keep control of your business and profits, because no other parties have any ongoing shared ownership over your business. Plus, the interest paid is often tax-deductible.

The main disadvantage, of course, is that you need to repay the money you borrow — usually with interest. And in the days of rising interest rates, that’s of real concern. The RBA has recently indicated that not only will rates not fall in the near future, they will probably continue to rise.

So, while debt finance can be a good short/mid-term fix, it can also lead to more problems in the future. Many businesses also find it challenging to get debt finance without offering personal asset security, particularly if they’re just starting out or don’t have sufficient equity. But for an established business that is looking for funding to grow, debt finance is often a solid option.

Business Financing Method #3 — Equity Finance

The third popular business capital solution is equity finance, where an investor provides funding in exchange for owning a piece of your business. Typical examples of investors include venture capitalists (professionals who invest in existing companies) and angel investors (individuals who invest in start-ups).

This can be less risky than debt financing, as the investment isn’t a debt you need to repay.

The downside is that you lose control and ownership of part of your business. It can also be hard to find the right investors — people who are both willing to invest and who you want to share future ownership with.

Alternative, flexible business capital solutions from Octet

The pressures and challenges on businesses are changing, but so too are business owners and leaders. According to the report Where Opportunity Lies: Australia’s new small business boom, created by Xero in partnership with Accenture, a new generation of business owners is emerging.

The report shows that of the latest wave of entrepreneurs, 45% are aged under 35. Of those who started a small business recently, 37% were born overseas. Meanwhile, 36% of small business owners are women. The report also reveals that over the next decade, 3.5 million new small businesses are expected to be registered.

Without a solid credit history, this new wave of business owners might find traditional funding difficult to access and will be looking at non-traditional means to launch and grow their businesses.

Alternative, flexible business capital solutions are almost certainly the way of the future.

At Octet, we believe that businesses should ideally be able to fund themselves. Business owners and managers who can think laterally about funding are the ones in the best position to grow.

That’s why ‘funding your own business’ is at the heart of all our financing options. We offer three alternative business working capital solutions:

The right one for you depends on the size of your business and your unique needs.

Business Financing Method #4 — Debtor Finance

Debtor Finance uses the biggest ongoing asset most businesses will have: their accounts receivables. Briefly, this solution lets you convert up to 85% of your unpaid invoices into immediately available funding within 24 hours. This means you can have the funds straight away, without waiting the 30, 60 or 90 days it might normally take your customers to pay you. Just imagine how much that would improve your cash flow cycle!

Better yet, we offer this without requesting you use your property as security, which many banks require. Using the Director’s personal assets as security isn’t an issue when the property market is going well (assuming you own property). But if you’ve maxed out your property equity — or you don’t own any — you do need another option.

Our Debtor Finance solution is available to Australian businesses across a wide range of industries, from newer companies to well-established ones. Ideally, you’ll have an annual turnover of at least $1 million, and at least two years of business operation.

Business Financing Method #5 — Trade Finance

Trade Finance gives you a revolving line of credit to pay your suppliers both locally and in more than 72 countries. Again, we don’t need you to provide personal asset security. Instead, you’re generally securing funding against the strength of your balance sheet, with just a company and director guarantee.

With up to 60 days interest free and 120-day repayment terms, our Trade Finance facility is flexible too. You can use it either as your primary funding source or to supplement your current bank or other financing arrangements. So if your bank can’t offer all the funding your business needs, or you want to diversify streams, we’re happy to help.

To be eligible, your business ideally needs an annual turnover of at least $3 million to $5 million and to have shown a profit for the last two financial reporting periods.

Business Financing Method #6 — Supply Chain Accelerate

Our Supply Chain Accelerate facility is like a hybrid of Trade Finance and Debtor Finance. It links suppliers and buyers in one process to free up working capital, which you could use to invest in supply chain innovation or other business growth strategies. The supplier gets paid 100% of their invoice upfront while the buyer has 30, 60 or 90 days to repay us.

Supply Chain Accelerate is completely unsecured, with no director or company guarantees required. And because it’s an off-balance-sheet source of funding, it doesn’t interfere with you taking out other business loans.

If you’re a supplier, this facility is hugely beneficial when you deal with larger companies that have an extended payment cycle. It means you generally access the credit rating of the bigger company to get paid earlier. Meanwhile, as a buyer, you can take advantage of potential early payment discounts to pay upfront and free up cash flow.

Supply Chain Accelerate is available to larger, profitable businesses with a substantial annual turnover.

Power your business with Octet’s supply chain finance options

Every business, from the smallest enterprise to the largest company, will need access to financing at some stage in their lifecycle. Having reliable, accessible business finance is a must, particularly during times of uncertainty.

The best funding method for your business will depend on a range of factors. At Octet, we help you find the business financing solution that’s right for you. We not only power your business growth, but we also empower you as a business owner or executive with better control over your supply chain.

Our team of supply chain finance specialists have helped Australian business owners and their local and global trading partners access the funding required to succeed. And we’re ready to help you better understand your business finance options.

Ready to take the next step with your business? Let’s take it together… Talk to us today about how to finance 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 judgement. 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 judgement as at the date of publication and are subject to change without notice.

Supply chain innovation: Why investing in technology could give your business the edge

Posted on September 30, 2022May 20, 2024 by Russell Walsh

Want to know what the world’s most popular supply chain planning method is?

Spreadsheets.

Yes, you read that right.

A McKinsey & Company survey of global supply chain leaders in 2021 revealed that almost 75% of respondents rely on spreadsheets to do their supply chain planning. However, 61% believe technology enhances their competitiveness, according to a recent Gartner survey. Why, then, isn’t there more urgent investment in supply chain technology innovation?

90% of the McKinsey & Company survey respondents indicated that they plan to adopt a new supply chain planning system in the next five years. However, this may not be fast enough – especially when you consider the second most popular supply chain planning method is SAP’s Advanced Planning and Optimisation software, which they’ll no longer support from 2027.

Companies need to invest in supply chain technology now if they’re going to reap first-mover benefits and not be left behind. But, in upgrading digital supply chain technology, the challenge is not to get swayed by the latest shiny thing. Instead, companies need to choose wisely, based on real business needs.

To help your business find the right solution, here’s an overview of the most promising supply chain tech on offer, and what to consider before investing.

Top supply chain tech to streamline processes

In light of recent supply chain management bottlenecks and the pressure to develop ethical supply chains, investing in technology to streamline processes is worth considering.

But how do you know which technology is right for your business? Let’s explore three types of technology that you can use to create a more efficient supply chain.

The internet of things (IoT)

The Internet of Things (IoT) describes a network of devices that communicate and exchange data wirelessly. IoT can remotely track physical items, such as goods in transit, and monitor environmental conditions, such as the temperature inside a transport vehicle or the moisture content of soil.

When combined with predictive analytics (the use of data, machine learning algorithms and modelling to make predictions), IoT in the supply chain can deliver immense benefits. As just one example, logistics companies can leverage IoT and predictive analytics to deliver real-time route optimisation to their drivers, factoring in goods-on-board, goods-for-pick-up, traffic congestion, distance and weather. This saves time, fuel, vehicle wear and tear and, ultimately, money.

Besides streamlining delivery processes, IoT can:

increase the visibility of goods and assets
improve customer experience
enhance product traceability, transparency and speed of delivery.

If you are considering investing in IoT, make sure that you factor in the security of your IoT devices so that they maintain data privacy requirements and are protected from cybersecurity vulnerabilities. You may also need to consider how you will integrate the data from different devices and sensors to your internal CRM and other systems.

Robotics

Robots are being put to work across the supply chain, from assembling and inspecting electronics components to picking and heavy lifting in distribution centres.

For example, advanced-technology company Honeywell has found that mobile robots powered by artificial intelligence can dramatically reduce picking times in the warehouse by nearly 50%. And that’s just when they take over the transport tasks of the workflow.

A Deloitte analysis has found that using autonomous robots in the supply chain has the potential to:

ensure long-term cost savings
create stability in labour and utilisation
boost productivity
decrease errors
enable fewer inventory checks
streamline picking, sorting and storing
improve safety by decreasing access to dangerous areas or performing dangerous tasks on behalf of humans.

To reduce risk and maximise your investment, experts recommend performing smaller-scale tests of robotics before doing a complete rollout. It’s also important to deliver an effective change-management process for existing workers to alleviate fears about potential job losses. Currently, robots are doing the more mundane or dangerous tasks so that people don’t have to.

Data science — AI, machine learning and analytics

As we saw above, data science — which includes AI, machine learning and analytics — can strengthen the effectiveness of other supply chain technologies, such as IoT and robotics.

You can use data science for supply chain forecasting to identify any future problems so that you can take action now to prevent them from occurring. You can even use it to enhance your decision-making. The technology can analyse your data and provide actionable recommendations to streamline and optimise your supply chain.

However, before you invest in data science technologies for your supply chain, you need to consider both your data sources and capture methodology and whether you have enough digital supply chain talent and expertise on your team (to actually interpret, communicate and drive action on any data insights).

Supply Chain Management platforms

The lowest risk, lowest initial investment supply chain tech innovation for most companies would be moving from spreadsheets to a supply chain management platform. Octet’s proprietary supply chain management tool makes tracking, validating and authorising every step of your supplier and customer transactions simple, taking the hassle out of managing your supply chain.

Save time by centralising supply chain management – get clear visibility across each stage of a transaction and every purchasing document. No more information scattered randomly across email, messaging and paper notes.
Reduce confusion by eliminating the language barrier – avoid expensive – and potentially relationship-damaging – misunderstandings by easily communicating with your suppliers in their own language using a multilingual supply chain management tool.
Decrease costs by paying suppliers in up to 15 currencies from multiple funding sources with competitive FX rates. Make payments to 68 countries and close your working capital gap by having up to 120 days to repay us, if you pay using our Trade Finance solution.

Real-world supply chain innovation examples

To get a better understanding of the impact of supply chain technology innovation, let’s take a look at two real-world examples.

Officeworks employing autonomous mobile robots (AMRs)

In their Victorian distribution centre, Officeworks has deployed 86 AMRs and 30 sortation robots. Working with fulfillment team members, the robots are helping with picking from more than 25,000 stock-keeping units (SKUs).

By using robots, the distribution centre’s human employees have been able to spend less time walking around since the robots can take the fastest and most direct route. Previously, the human team walked a startling 10–12 kilometres each shift before employing the robots.

This has enabled Officeworks to have better inventory control and an expanded delivery window for its next-day and express delivery services.

Coca-Cola uses AI and machine learning to enhance supply chain efficiency

To enhance its sourcing and procurement processes, Coca-Cola uses a software platform based on AI and machine learning technology.

The platform allows managers to explore “direct and indirect procurement bid information from suppliers and then analyse multiple awarding scenarios based on those criteria and other constraints”. After analysing the relevant data, including supply chain disruptions and vendor information, the platform provides recommendations.

Coca-Cola has found AI and machine learning instrumental in simplifying its procurement process. For example, at previous procurement events, Coca-Cola staff had to manually cleanse and validate bids from over 200 potential suppliers. Now, they have an automated bid cleansing process.

Unlock your supply chain innovation potential

Octet’s intelligent supply chain finance, payment and management solutions can help fund your business growth, giving you the power to further invest in supply chain innovation.

So, if you’re ready to power innovation in your supply chain, get in touch with the team to find out how we can help.

How to overcome your supply chain bottleneck woes

Posted on August 8, 2022May 20, 2024 by Russell Walsh

When international borders were free-flowing, shipping containers plentiful and COVID-19 unheard of, ‘just-in-time’ supply chains made sense.

With the pandemic-induced logistics and supply chain management bottlenecks, many companies switched to a ‘just-in-case’ approach.

It’s easier to meet fluctuating customer demand with a just-in-case inventory model. But it also means increased warehousing costs and the requirement to have more upfront capital to buy extra stock. It’s one of many reasons why Australian businesses are concerned about the ongoing supply chain disruptions.

Supply chain logjams were predicted to ease considerably in 2022. However, the Omicron variant and Russia’s invasion of Ukraine have thrown a spanner in the works.

Now, experts are saying that supply chain disruptions are more “deep-rooted” than previously thought and “any hopes of near-term improvement in supply chain conditions have been shattered.”

However, it’s not all bad news. Even with these recent forecasts, your business can take active steps to protect itself from supply chain disruptions. Here’s how you can prevent a ‘just-in-case’ supply chain from becoming a ‘just-can’t-win’ situation.

First, let’s explore the factors creating the ongoing supply chain issues and their impacts in greater depth.

What’s behind the continuous supply chain crunch?

The pandemic has put enormous strain on supply chains due to:

Shifts in consumer spending from services to goods. During lockdowns, consumers had to change their spending habits. Instead of spending money on in-person services such as dinner at a local restaurant, overseas holidays or an evening at the movies, consumers bought stuff. A lot of stuff. This, in turn, increased demand for shipping and transporting goods.
Manufacturing and distribution disruptions. Lockdowns, staff illness and quarantine requirements meant that manufacturing and distribution facilities experienced unscheduled closures and production pressures.
Border procedure bottlenecks. Additional protocols, border checks and documentation procedures all contributed to transport delays.

As a result of these supply chain disruptions, businesses and consumers were impacted by increased shipping costs and delays.

During initial lockdowns, goods movement was significantly reduced. This meant interruptions in the normal circulation of shipping containers from port to port, causing an imbalance of empty shipping containers across locations. Some ports desperately needed more, while others had an influx.

Ultimately, increased shipping demand, combined with empty container shortages, port congestion and labour shortages, led to surging costs and lengthy delays for businesses and their customers. And these impacts are expected to “persist through 2022”.

Like highway traffic jams, it takes time to clear supply chain congestion and return it to normal flow. The problem is that supply chains were hit with too many curveballs and haven’t had a decent chance to recover.

In 2022, the rise of the Omicron COVID-19 variant impacted major ports in China, as cities were locked down in response. If you’ve been importing from China, you’ll know that shipping delays and congestion have increased again.

Russia’s invasion of Ukraine has also caused supply chain disruptions. According to a recent Australian Financial Review article, the war has increased shipping costs due to route closures, fuel increases and ‘war risk surcharges’ imposed by some carriers.

Photo of a warehouse made of steel. Transposed on top of the photo is an illustration of a delivery app, which includes a box in the middle surrounded by a truck, wine goblet, globe, telephone, customer service person, a trolley and truck. — Well-established brands like Revlon have not been immune to supply chain disruption.

Real world impacts of ongoing supply chain woes

Despite rising costs, delayed deliveries and a shortage of key materials, some Australian companies could face even more significant problems given the persistent supply chain challenges.

Australian importer of premium natural stone slab and tile, Worldstone Solutions, have experienced these issues first hand.

“Factory shutdowns and capacity issues, shipping container availability and port closures have all contributed to the supply chain bottlenecks we’ve had to overcome in the past 18-24 months. We’ve seen client demand change as a result though. Clients are ordering more, and earlier; they’re more focused on delivery timeframes over price or are willing to compromise by selecting in-stock products only,” says Paul Nahon, Director at Worldstone, an Octet Finance client.

Even global, well-established brands have not been immune. In June, Revlon declared bankruptcy, saying that supply chain disruptions had caused a runaway increase in raw materials costs. In response, vendors insisted on upfront payments, and it became all too much for the cosmetics giant.

The RBA released its latest Financial Stability Review in April, which indicated that although the insolvency rate is rising from a relatively low base, more pain is on the horizon. The report states:

“Further increases in insolvencies are also likely, particularly as vulnerable businesses continue to draw down on cash buffers to cover lost revenue or higher costs.”

Mr Nahon concurs with this as he’s witnessing the trickle down pressure of these supply chain disruptions on his business and supply chain partners. He says, “the risk of insolvency is particularly high when we’re supplying stone to a builder who agreed a fixed price to deliver the project. In these situations, there’s an increased risk to all the builders’ suppliers as the builder has to either break supplier contracts for cheaper alternatives or put themselves in a loss-making situation.”

These pressures aren’t going away any time soon, which is why it’s more important than ever to work to protect your business from them.

Photo of warehouse shelves stacked with boxes. Transposed onto is an illustration of an Internet application. — It can be challenging to manage the funding gap when paying suppliers.

How to protect your business from supply chain pressures

Working capital is crucial for your business to weather the ongoing supply chain disruptions. Never has the phrase ‘cash is king’ meant more. However, it can be challenging to manage the funding gap between paying suppliers, waiting for goods to arrive and waiting for buyers to pay.

With Octet’s Trade Finance facility, you can bridge these cash flow funding gaps. It gives you access to a flexible line of credit with up to 60 days’ interest-free and up to 120-day repayment terms.

Alternatively, our Debtor Finance solution may be an option for your business. It lets you tap into up to 85% of the funds tied up in your accounts receivable straight away. Instead of waiting up to 60 days for payment, make your unpaid invoices work for you by converting them into fast working capital.

Through our working capital solutions, you can better manage your cash flow, minimise financial risks and maximise the efficiency of your supply chain.

Power your business growth

In the face of ongoing uncertainties in the business landscape, now is the time to adapt. There are still significant growth opportunities afforded by Australia’s international trade relationships, particularly the interim India-Australia trade agreement signed earlier this year.

Our intelligent supply chain finance and payment solutions can help to satisfy your working capital requirements, particularly for overseas business transactions.

Get in touch with one of our finance specialists today to discover how we can power your business to scale.

Funding for business growth: what you need to know

Posted on October 29, 2021May 20, 2024 by Russell Walsh

For businesses experiencing rapid growth, this can be an exciting – yet challenging – time.

With increasing demand and growing revenue, you can see several opportunities ahead. To meet this new demand, you might consider expanding your workforce, automating processes and introducing new products or services.

But all this change requires investment.

The question then becomes how to best fund business growth to create consistent, sustainable progress. Options range from debt to equity to internal funds, but the best financing option for your business can vary according to your operations and ambitions.

Debt financing is typically the best choice for businesses that lack the internal funds to fuel growth when the owners want to retain control. And while banks are often the first place that businesses turn to for debt finance, they aren’t always the best fit.

So, depending on the nature of your business, alternative funding sources might offer more flexible and cost-effective financing – often acting as a supplementary facility to any bank arrangements.

How business loans work

Debt financing is money that you borrow and then pay back with interest over an agreed period of time. Also known as a business loan, debt financing is designed specifically for business purposes. It typically includes fixed amounts to cover one-off projects or purchases or a line of credit.

Business loans can vary in terms of rates, repayment terms, loan terms and the type of security required.

When most people think of business loans, they think of borrowing money from their bank. To secure a business loan from a bank, you’ll need to provide evidence that your business is sustainable and can service its debt.

Banks generally have a low appetite for risk (see below), so they can – and often do – need extensive assurance about the viability of your business. Each bank has its own lending and eligibility criteria, but you’ll usually need to provide:

information about your trading history
information about your credit history
financial statements, including balance sheets and profit and loss statements.

Depending on the nature of your business, you may also need to provide additional information such as a business plan, contractual agreements or cash flow projections.

It’s not surprising that banks are often the first port of call for business lending. As an existing customer of your bank, taking out a loan can seem like a natural extension of your business banking relationship. That’s probably why banks have traditionally been the primary source of funding for businesses.

But for businesses in a growth phase, borrowing from banks can be challenging.

Core challenges with business bank lending

While banks are often the go-to business funding choice, their loans generally come with added complexities, including:

Strict lending criteria

Thanks to operating in a highly regulated environment and being answerable to shareholders, banks tend to have a low appetite for risk. This generally means they take a more conservative approach to lending.

Complex paperwork

Paperwork goes hand-in-hand with strict lending criteria. Businesses often need to submit evidence from across several areas of their operations, which the bank will then assess as part of the approval process.

Long lead times

With strict criteria and complex paperwork requirements comes longer lead times. These lead times can occur not just during the application process, but also throughout the life of the facility. Some business bank transfer times can be as long as several days, resulting in delayed payments to suppliers.

High transaction costs

Bank service charges for businesses can be high, and add up over time. If your business has a high volume of transactions and you deal in exporting and/or importing, these fees can impact your profitability.

For businesses looking to grow, these challenges can have serious implications. Strict criteria and complex paperwork requirements can be difficult to meet for businesses on a fast growth trajectory or with very little stock on hand.

And even if a business meets the bank’s eligibility criteria, long lead times can cause them to miss opportunities, holding them back. Funding is a key ingredient for growth, so it’s critical for businesses to have the financing they need to support growth initiatives.

Beyond banks: other sources of finance available to a business

If you’re wondering what the best financing options for your business outside of (or in addition to) the big banks might be, consider our list of alternative debt finance options below:

Debtor finance

Debtor finance allows a business to borrow based on one of its biggest assets: its accounts receivable.

A debtor finance facility can help to bridge cash flow gaps by providing access to funds that are owed to your business when you need them. Rather than charging interest on a fixed loan amount, the finance provider instead charges a percentage of the amount owed in exchange for offering fast access to cash.

This can be a good option for businesses that don’t have the physical assets to offer as security to banks. They may have maxed out their property equity or have a business model that doesn’t require holding physical assets, such as eCommerce.

Trade finance

Trade finance is a type of funding that provides you with a convenient, revolving line of credit. Facilitated by a third party, it means you are able to pay suppliers instantly and enjoy flexible repayment terms. While it’s often used to streamline international trade, it can also help you strengthen relationships with local suppliers who may have short payment terms or require full payment upfront.

And much like with debtor finance, it doesn’t require businesses to provide physical assets as security.

Supply chain finance

Supply chain finance is a hybrid form of funding that covers both debtor and trade finance. It provides off-balance-sheet financing that helps to strengthen a company’s balance sheet while improving its cash flow management at the same time.

A supply chain finance solution links suppliers and buyers in the one process. If you’re a buyer, it enables you to settle a supplier’s invoice immediately and perhaps take advantage of early payment discounts. Then, you can repay the invoice amount at a later date, which can strengthen your supplier relationships without interfering with your ability to take out other loans.

Flexible business finance alternatives

Most companies need some form of finance to power their business growth. While banks can be a valuable source of funding for some growing businesses, alternative options often help to accelerate their growth.

At Octet, we offer a range of flexible business finance alternatives including:

Debtor finance: Get up to 85% of your invoices paid now to boost cash flow, without needing to provide personal asset security.
Trade finance: Increases your purchasing power with a competitive, convenient line of credit – with up to 60 days’ interest free and 120 day repayment terms.
Supply Chain Accelerate: Optimises your working capital with an off-balance-sheet source of funding.

If you’re ready to power your business growth, and receive more flexibility than the banks, get in touch with the team to find out how we can help.

Why supply chain analysis is important for your business

Posted on August 27, 2021May 20, 2024 by Russell Walsh

Supply chain management can play a critical role in the success of your business. It directly impacts your customer experience and financial performance, while also providing opportunities to build a competitive advantage. And as part of managing your supply chain, ongoing analysis is crucial.

Supply chain analysis can help you identify issues and opportunities with your current operations. Whatever your supply chain model, these issues are often linked to timing differences in managing supply and demand.

We take a look at the importance of supply chain analysis, the common issues businesses face and what you can do to close any gaps in performance.

“Supply chain management (SCM) is focused on reducing costs, improving efficiency and meeting demand to gain competitive advantage. It has a direct impact on performance, making SCM analysis crucial to managing a successful, profitable business.”

Physical supply chain issues

The physical supply chain refers to the system of business, people and activities used to move a physical product from one location to another.

Issues that can arise include:

shipping or general transport delays
sudden changes in demand
stock being held up in customs
stock quality problems
incorrect items or quantities

Physical supply chain issues have a direct influence on your customer experience. Supply chain analysis will help determine if customer’s expectations are being met. For example:

Can you provide the right quality and quantity of products? Customers should be able to buy the variety and amount they require.
Are delivery times within expectations? This can help build trust with your customers.
Are your products or services available to customers where and when they need them? Ensure customers have the support they need to make a purchase when they are ready.
If your customers have any issues, can they be resolved quickly? How are returns managed and can you organise repairs or replacements in a timely manner?

Financial supply chain issues

The financial supply chain refers to the monetary transactions that occur between trading partners around the supply of goods and services.

Common issues that can arise include:

increased overhead costs
logistics costs
funding gaps
lost sales due to late or incorrect deliveries

Financial supply chain issues have a direct impact on your financial position. They influence cash flow, profit margins and your ability to take advantage of new opportunities. Areas to consider include:

Can you consolidate suppliers to reduce overheads? Having multiple suppliers helps spread risk, while too many can add unnecessary costs.
How can you reduce shipping and transportation costs? Consider bulk purchases, collaboration with other shippers or automating the information exchange.
Is there room to trim inventory costs? Can you negotiate better deals or secure discounts by offering early payments? This can also have the added benefit of strengthening supplier relationships.
Can you help address funding gaps with flexible finance options? This can allow you to tap into your receivables and access funds when you need them, ensuring you don’t miss out on opportunities that arise.

Solutions to explore

Once you’ve identified your key supply chain issues, the next step in your analysis is to evaluate different tactics to improve the process. There’s a number of options you can explore, including:

Contingency planning

When disruptions occur, it can be helpful to have emergency plans in place. By mapping out different solutions beforehand, you can respond quickly and help minimise the impact on your business.

Strengthening your weakest links

If your analysis has identified risks with specific suppliers, it might be time to explore alternative arrangements. In addition to evaluating the business itself, it can also be useful to consider macroeconomic conditions (environmental, social, political) when deciding the best backups or alternative suppliers.

Engaging a logistics expert

Getting the balance right in your supply chain is challenging, especially as your business grows and the dynamics change. A logistics expert understands the complexities and sensitives involved. They can help with shipping and transportation, delivery times, supplier consolidation and more, which ultimately helps you save time and money.

Negotiating early payment discounts

Negotiating early payment discounts are one of the best tactics you can use to strengthen your supply chain. By providing early payments to the right suppliers, you can potentially reduce your costs and need for external funding, as well as strengthen key supplier relationships.

Improving cash flow

A strong cash flow position is a key marker of a healthy balance sheet – and a strong, resilient business. It can also be the most powerful tool you have in creating and protecting your competitive advantage. Flexible finance options such as debtor finance can help you tap into the power of your receivables, providing access to funds when you need them – and the momentum to keep growing your business.

Adopting the latest tools

The tools and processes you use to manage inventory can significantly impact both customer experience and business performance. Outdated planning tools can lead to inaccurate data, time lags in decision-making and a lack of visibility across the supply chain. Adopting the right supply chain technology can lead to real-time data, demand-driven analysis and accurate forecasting.

Managing customer expectations

Even businesses with the most efficient supply chains can encounter issues with customer service. If there is a gap between customer expectations and the service delivered, it might be time to better manage customer expectations. Clear communications about items in stock, product ranges, service delivery times and after-care service can go a long way towards managing expectations and delivering a positive customer experience. This can also avoid unnecessary added pressure on workflow and fulfilment.

By identifying issues and evaluating solutions, supply chain analysis can help your business proactively manage change. Making adjustments now can help improve efficiency, build resilience and better prepare your business for change.

Digitising supply chain analysis

Fundamental to almost any supply chain improvement is the streamlining of major underlying financial processes. By consolidating your supply chain processes onto the one integrated platform, you can reduce costs across the supply chain and improve business performance.

With a digital supply chain platform, you can:

access short term funding
easily locate trade documents
receive transaction notifications
pay suppliers securely
track each step of the process
trade securely within global banking standards

Analysis is the key to competitive advantage

Whether your business sells products or services, has a complex supply chain or a simpler process, the importance of supply chain analysis cannot be underestimated. By identifying issues, you can create new opportunities to improve the overall customer experience, increase profitability and get a step ahead of your competitors.

If you need assistance with supply chain analysis, we can help. Get in touch to learn how.

Western Union Business Solutions & Octet – Strategic Partnership

Posted on November 11, 2020May 20, 2024 by Russell Walsh

It is with great pleasure that we announce the strategic partnership between Western Union Business Solutions and Octet.

Octet is a trusted, technology-enabled, business financier that focuses on funding the full supply chain for Australian SMEs via innovative Trade, Debtor and Supply Chain Finance solutions.

Western Union Business Solutions have transformed how businesses can expand globally through one of the largest and most diverse payment networks in the world.

Together, we help Australian SMEs procure from their counterparts globally, by providing an unrivalled cross-border financing and foreign exchange capability.

Business cash flow & supply chain challenges

We understand that consistent cash flow is the single biggest challenge for any business, large or small. The challenge only intensifies when debtors are slow to pay invoices, or when sales are highly seasonal.

On the other side of a typical business’ supply chain, the best suppliers don’t always offer the best payment terms. Having a flexible line of credit to pay local and international suppliers immediately, which is repayable over time, is essential to meeting demand opportunities for fast growing businesses.

Justin Hall, Western Union Business Solutions, Head of Partnerships, ANZ said “We are genuinely excited around the additional power that this strategic partnership brings to our existing customer base. Octet have a truly market-leading range of working capital solutions and we’re looking forward to offering these as a complement to our innovative global payment and FX risk management solutions.”

Brett Isenberg, Octet Chief Commercial Officer added “It probably goes without saying, but Western Union Business Solutions are a very significant player in the Australian and global payments landscape. This strategic partnership is exciting for Octet in that it gives us the opportunity to work with WUBS and their expansive Australian client base around finding innovative supply chain finance solutions to meet their evolving cash flow challenges. When you consider the current turbulent economic conditions and subsequent reduced funding appetite from the big banks, the opportunity is amplified.”

For further information regarding this strategic partnership, please speak to your Account Manager and watch out for further announcements in the near future.

General enquiries:

Octet – Joe Donnachie (jdonnachie@octet.com)
Western Union Business Solutions – Justin Hall (justin.hall@westernunion.com)

Disclaimer: © 2020 Octet Finance Pty Ltd (ACN 124 477 916). Terms and Conditions apply, including Octet’s facility approval guidelines, which are available upon request. The content contained herein should not be construed as advice and is accurate at the time of publishing. You should act using your own information and judgment.

© 2020 Western Union Holdings Inc. Western Union Business Solutions is a business unit of The Western Union Company. Western Union Business Solutions (Australia) Pty Limited ABN 24 150 129 749 and AFSL 40409 (“WUBS”) is the issuer of the financial products referred to above. A Product Disclosure Statement is available for each of the financial products that WUBS issues and can be obtained by visiting our compliance and legal web page: http://business.westernunion.com.au/about/compliance/

Octet on 6PR’s Perth Live with Oliver Peterson

Posted on October 26, 2020May 20, 2024 by Russell Walsh

With cash flow absolutely top of mind for Aussie SMEs in the current turbulent economic conditions, it was a fantastic opportunity for our Director of Working Capital Solutions, WA, Nigel Thayer to speak with Oliver Peterson on 6PR’s Perth Live program. Listen to the full interview here.

Methods that worked well for fast-growing businesses in 2019 may not be having the same impact in the current climate, and Nigel covered some top cash flow management tips, including:
– creating a short-term cash runway
– increasing internal and external stakeholder communication
– identifying alternative sales channels; and of course
– accelerating your access to outstanding cash via intelligent working capital solutions!

Disclaimer: This article and any associated content 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.

WA labour hire firm – building on success

Posted on October 23, 2020May 20, 2024 by Russell Walsh

The Scenario

This labour hire business has been operating in Western Australia for over 10 years.

Providing skilled labour to mining, civil, and trade sectors, it’s been self-funded since its inception in 2008, with a healthy balance sheet and around $10m of annual revenue.

When the business initially approached Octet, it was structured under a 50/50 shareholder split, with one half being a silent partnership. Funding was sought to help restructure the business, as well as cater for ongoing business costs.

To assess the company’s situation and recommend the best solution, Octet reviewed the viability and concentration of the company’s current debtors, discovering that the business had a major debtor with a 50% concentration of all receivables. The same debtor also had a strong, positive payment history with the company.

The Solution

Octet recommended a disclosed Debtor Finance facility, allowing for regular checks and payment tracking with full disclosure to the debtors.

The Debtor Finance facility helped the initial change of ownership in the business, with the Managing Director and shareholder using these funds to buy out the silent partner’s share (covering both their loans and equity).

With 2020 performance tracking well, and expectations that the business will quickly return to profitability, the company can also use this facility to inject new cash into the business, helping them build on their ongoing success.

In the labour hire industry and looking for flexible Debtor Finance?

Talk to us today

How to manage your financial supply chain

Posted on October 23, 2020May 20, 2024 by Russell Walsh

2020 has presented supply chain managers with some interesting challenges. Unexpected spikes (or dips) in demand, late payments, and shipping delays are just some of the issues facing businesses worldwide. Weaknesses in supply chains have been exposed, and creating a stable supply chain has become a key priority.

If you’re considering how to better manage your supply chain, it’s time to re-think the traditional physical supply chain model. By taking a detailed look into your processes, and making clever use of supply chain finance arrangements, you can better prepare your business for the unexpected.

More than one supply chain: the physical vs the financial

When talking about supply chains, most people think of just the physical supply chain – i.e. The system of business, people, and activities used to move a physical product from one location to another. Issues in the physical supply chain can include shipping delays, sudden changes in demand, or stock being held up in customs.

But there’s another, concurrent supply chain that applies to all businesses, regardless of whether you supply a physical product or service – the financial supply chain.

The financial supply chain refers to the monetary transactions that occur between trading partners around the supply of goods and services. It often doesn’t get as much attention as the physical supply chain, however it has a big impact on working capital and the availability of cash to keep your business going.

If your business sells physical products, you have both a physical and financial supply chain. They’re closely linked, and any weaknesses in one chain will affect the other.

If your business is service based, you’ll have a primarily financial supply chain. It includes incoming payments for your services, and outgoing expenses across things like wages, rent, and subscriptions.

Regardless of your business’ supply chain scenario, there’s one key factor that has the biggest impact across both – timing.

It all comes down to timing

The difference in timing of cash going in and cash going out is a key challenge for every business. It directly affects the availability of cash, and your ability to cover costs when they fall due.

And as finance expert, and Octet partner, Alan Miltz says,

“Revenue is vanity, profit is sanity, and cash is king.”

So, now’s the time to review your supply chain and ensure you have the cash you need to successfully run your business.

Financial issues affecting the supply chain

There are some common financial issues that arise from the supply chain.

Whenever you have money that needs to go out before it’s coming in, it creates classic cash flow gaps that you need to manage. Here’s what these gaps might look like in your business:

Funding gap – You have suppliers you need to pay before you get paid by your buyers.
The growth factor – As your business grows, so does the value of the funding gap. The bigger the gap, the more funds you’ll need to cover it.
Moving beyond equity – When your business is in its early stages, you may be able to fund its activities using equity. As it grows however, you may need more funding and more sophisticated solutions to help manage your finances.

The impact of Covid-19 on the supply chain

COVID-19 has highlighted weaknesses in supply chains throughout the world.

We saw a perfect example of this in Australia when isolation measures were first enforced. Panic buying saw stock cleared from supermarket shelves, with certain products difficult to access for weeks or even months.

This sudden, unexpected surge in demand left many businesses unable to meet their customers’ needs (a problem that can still be seen in some sectors today). While this was an abnormal event, it highlights one of the risks that can occur within your supply chain.

Another longer term impact has been the lingering uncertainty around closures, restrictions, and potential secondary spikes of the virus. This has affected the mindset of business owners worldwide, and we’re seeing increased requests from suppliers to be paid faster, and from buyers for extended payment terms. The widening gap between buyer payments and supplier terms is creating added financial pressure across the supply chain.

Taking the financial pressure off your supply chain

One of the best ways to manage uncertainty and financial pressure is to look at how you can improve the process and flow of cash throughout your supply chain. Here are some key supply chain levers to consider:

Negotiate more favourable payment terms with your suppliers

By offering suppliers early payment, you can often secure greater control over your financial supply chain as well as potentially discounted rates (allowing you to reduce your costs at the same time). If you need a financial boost to help pursue this, consider the use of Trade Finance to enhance your purchasing power.

Encourage faster payments from your buyers and secure invoice finance

Incentivising buyers to make payments faster (by offering a discount, for example), can be a great way to shrink your funding gap.

Debtor Finance can also be a smart way to access funds tied up by your debtors. By using your invoices as collateral, you can access funding sources you may not have previously considered.

Consider suppliers and buyers

Are you working with both suppliers and buyers? Can you see available benefits on both sides of your supply chain, but lack the liquid funds to make it happen? A back-to-back funding solution may be the answer.

Streamline your processes

If you’re using multiple systems and/or still rely on paper for parts of your operations, consolidating your processes onto one integrated platform could help streamline the flow of goods – and cash – in your supply chain, and also reduce your costs.

Use supply chain finance to enhance your process flow

Supply chain finance facilities are flexible funding options that can help you improve your supply chain management, and keep cash flowing through your business when you need it most. With solutions to suit each part of your process, we can help you better manage the timing of your cash flow while also minimising your financial risks.

Interested to see how we can help tackle your financial supply chain challenges? Get in touch to discuss the different options and find out what might work best for your business.

Octet & G&H Financial – SME Working Capital Masterclass (Ep’s 3-5)

Posted on October 19, 2020May 20, 2024 by Russell Walsh

In this educational series, leading finance brokers, G&H Financial meet with innovative working capital financier, Octet to discuss some of the most important issues facing SMEs today.

The third instalment discusses the importance of using finance brokers, particularly in the current turbulent economic conditions for Australian SMEs. Check out the full video below.

The next episode in our SME Working Capital Series explores the critical topic of foreign exchange risk for SMEs.

Whether your importing or exporting, foreign exchange fluctuations can have a significant impact upon your profit margins – particularly in the current turbulent economic, political and social environment. With the full impacts of COVID-19 still coming to fruition in global markets and the fast approaching US Presidential Election, it might be a savvy move to speak with a foreign exchange expert to identify and minimise your business’ exposure to the fluctuating FX market.

Check out the full video below.

The final instalment in our series explores some client case studies, which help bring to life Octet’s various working capital solutions.

The first is a well-established NSW beverages business, who required a flexible Debtor Finance facility to gear up for higher seasonal sales volumes.

The second case study explores an asphalting business, who were prospering in the current conditions, but required additional working capital to take advantage of the various opportunities being presented to them.

Watch the full video below.

Octet on 2GB & 3AW’s Money News

Posted on October 14, 2020October 14, 2020 by Russell Walsh

With cash flow never being more important for Aussie SMEs than in the current uncertain economic conditions, it was a fantastic opportunity for our Senior Working Capital Specialist, NSW, Joe Donnachie to speak with Brooke Corte and Scott Haywood on 2GB & 3AW’s Money News program.

Methods that worked well for fast-growing businesses in 2019 may not being doing the trick in the current climate, and Joe covered some top cash flow management tips, including:
– creating a short-term cash runway
– increasing internal and external stakeholder communication
– identifying alternative sales channels; and of course
– accelerating your access to outstanding cash via intelligent working capital solutions!

You can listen to the full podcast here.

VIC freight forwarding company – unlocking working capital to fuel growth

Posted on October 1, 2020May 20, 2024 by Russell Walsh

The Scenario

Recently established in January 2019, this award-winning freight forwarding company uses cutting-edge shipping systems to enhance freight movement and improve productivity. In its first year, the company secured major customers in Australia and the UK across a range of industries including construction, stationery and healthcare.

Going against the industry standard, this client covered all costs and only invoiced their customers at completion of delivery. While this approach helped the client secure major customers, it also meant they had a longer cash flow cycle. However, the relationships they built, and their unique service offering, meant the company experienced rapid growth, four times higher than projections. This resulted in a greater working capital requirement and a need for a transport financing solution to help bridge the gap.

The Solution

The company heard about Octet on the radio and visited the website to see how we could help to improve their working capital position. Octet worked closely with the company to understand their business, invoicing process, obligations and growth potential before suggesting a solution.

Octet provided a flexible transport financing solution that helped the company shorten the cash flow cycle and increase their working capital. The decision was based on the profitability of the business, the quality of the debtors and the quality of their paper trails.

With a $2.5 million Debtor Finance facility approved, the business can not only meet their statutory obligations, but is now well-placed to capture new opportunities to power their growth.

Working Capital Solutions

Trade Finance

Debtor Finance

Supply Chain Accelerate

OctetPay

Industries

Why Octet

Digital wallet

Global network

Cross-border payments

Supply chain management

Security

Rewards

A fresh option: seamless international money transfers for businesses

FX for business: OctetPay is the solution

So, what are the other benefits of choosing OctetPay?

Octet makes business easier

Power your growing business

The lowdown on non-bank lenders

Australian businesses turning away from banks

The limitations of bank lending

Banks no longer working for your business? Think outside the box

Non-bank lenders: the future of business funding

The current landscape of business credit cards

Seeking a better solution

The Octet digital wallet difference

Simplify your finances with Octet

What is business growth?

How to promote business growth

Why fast-growing businesses partner with Octet

Giving you the power to grow

The State of the Industry: Opportunities and Challenges

Key Trends Shaping the Industry

Why Financial Flexibility Matters

Financing Solutions for Food and Beverage Businesses

Building a Resilient Future

Powering the food and beverage industry

Challenge 1 — The skills shortage

Challenge 2 — Clinical trials playing catch up

Challenge 3 — Supply chain disruptions

Challenge 4 — Cultural focus on prevention, rather than treatment

Challenge 5 — Developing new cures for presently incurable diseases

Power your business growth with Octet

Why you need business finance

New challenges in business finance

Traditional methods of financing a business

Business Financing Method #1 — Internal Funds

Business Financing Method #2 — Debt Finance

Business Financing Method #3 — Equity Finance

Alternative, flexible business capital solutions from Octet

Business Financing Method #4 — Debtor Finance

Business Financing Method #5 — Trade Finance

Business Financing Method #6 — Supply Chain Accelerate

Power your business with Octet’s supply chain finance options

Top supply chain tech to streamline processes

The internet of things (IoT)

Robotics

Data science — AI, machine learning and analytics

Supply Chain Management platforms

Real-world supply chain innovation examples

Officeworks employing autonomous mobile robots (AMRs)

Coca-Cola uses AI and machine learning to enhance supply chain efficiency

Unlock your supply chain innovation potential

What’s behind the continuous supply chain crunch?

Real world impacts of ongoing supply chain woes

How to protect your business from supply chain pressures

Power your business growth

How business loans work

Core challenges with business bank lending

Strict lending criteria

Complex paperwork

Long lead times

High transaction costs

Beyond banks: other sources of finance available to a business

Debtor finance

Trade finance

Supply chain finance

Flexible business finance alternatives

Physical supply chain issues

Financial supply chain issues