To grow any business, you need capital, particularly working capital in 21st century Australia where services dominate the economy. 

No finance, no growth and that includes wages.

Invoice finance has been around for about 4,000 years. Called Factoring or Invoice Discounting, it hadn’t changed much at all until recently.

But now with the global evolution of Confidential Invoice Trading, it is becoming a full-on 24/7 21st century engine of growth for those in the know. In the UK alone, over $2bn of trades have been completed and now it is growing at similar rates in Australia. However, many businesses are missing out on this simple and effective method of growth funding due to the myths that still exist around it.

Here are the top 5 invoice finance myths and how they compare to the facts.

This table shows how we need to do much more to help our SME businesses, the employers of most Australians and our best prospects for a better future.

As the world comes to terms with the shock election of Donald Trump as US President, we believe that financing Australian businesses is likely to become more challenging with knock-on consequences for our next election.

In the mid-market alone, we estimate that up to $15 billion in working capital finance could be required every year to catapult our most dynamic businesses forward. With annual revenue of $5 million to $250 million and 50 to 500 employees, they are the engine room of our economy. But the Trump Tsunami is about to make things harder.

Traditionally, the first port of call for a business owner is his bank. There needs to be a clearer understanding about what banks are incentivised to do these days. They are not interested in unsecured lending to SME businesses - overdrafts, working capital, etc. Regulatory capital weightings penalise banks for lending on anything but real estate by a factor of about 4x. That's before even considering the high staff costs involved in making and monitoring credit decisions involving non-real estate collateral. Too hard. This is why credit cards are the main source of working capital for SMEs today but try getting a $200k limit!