Rising interest rates, the cost of living and a growing number of businesses finding themselves in default of their bank loans is leading to a spike in alternative lending options.

Leading Australian financing company OptiPay has issued over $25M in new facilities since the start of this year – a near ten fold increase in new client take ons.

“We’ve had a huge spike in broker-driven enquiries as access to capital becomes more difficult for many businesses,” says OptiPay CEO Angus Sedgwick.

“Banks are becoming more risk-averse in the current climate and it’s forcing many businesses to look at alternatives to maintaining their cash flow,” he says.

OptiPay specialises in invoice financing – a revolving line of credit against unpaid invoices – to improve business cash flow.

“The majority of new enquiries have come from the agriculture, transport & logistics, mining services and manufacturing,” says Mr Sedgwick.

“Many SME’s are increasingly turning to brokers to facilitate their lending as they juggle unpaid tax debts, supply chain issues and rising inflation.”

“Our main aim is to help businesses that are going through a period of growth and we understand that there are challenges that come with that. As long as they have a good model and they have orders coming in, we can work with them,” he says.

“Any business that invoices another business for goods or services on credit terms is a good candidate for an invoice financing facility,” says Mr Sedgwick.

“Businesses can typically access up to 90% of their sales revenue within 24 hours of issuing the invoice. Unlike more traditional business loans there are no ongoing repayments back to the financier as they are repaid when the debtor makes payment of the invoice/s. The fee paid to the financier usually ranges from <1% up to 3% of the invoice value.”

“Cash flow is everything for a business and in the current economic times it’s even more important it’s maintained,” he says.