Finstro joins SME Guarantee Scheme 2.0

Finstro joins SME Guarantee Scheme 2.0

Specialist SME business payments provider Finstro has been announced as an approved lender in the Federal Government’s second phase of the Coronavirus SME Guarantee Scheme.

Under the scheme, Finstro will offer eligible small businesses a specialist Line of Trade Credit with flexible repayment options, including up to 12 months of no repayments.

Finstro has received an allocation that can be applied to all eligible clients signed up by 30 June 2021.

Finstro Chief Product Officer Tom Whitworth welcomed the Government’s expansion of the scheme.

“Australia’s road out of the COVID-19 recession depends on the health of our small business community. We are pleased to be joining the Federal Government’s SME Guarantee Scheme, helping to quickly deliver capital to small businesses during this challenging time,” Mr Whitworth said.

Trade credit critical to small business recovery

As one of the largest credit forms used by SMEs in Australia, greater access to trade credit is critical to Australia’s small business rebound, Mr. Whitworth said.

“Trade credit is a key tool of SME cashflow management and has become even more important in the face of COVID-19. As credit risk has increased within the SME market, many suppliers are reducing the trade terms they offer business clients and many small businesses have moved to cash-on-delivery, placing further pressure on cashflows,” he said.

“The Government-backed Finstro Line of Trade Credit will also give suppliers the confidence to offer trade credit again, by offering them payment upfront and providing extended and flexible trade terms to their small business customer.”

Uniquely positioned to support SMEs

Whilst Finstro can offer businesses lines of trade credit of up to $250,000 under the scheme, Mr Whitworth said Finstro’s clients typically sought out facility limits much less than this figure, meaning Finstro would be able to assist a large number of SMEs, providing credit where it is most effective.

“These sorts of solutions enable SMEs to invest in their business future as and when they need to – and at no cost when they don’t.”

As a fintech with 100% digital business processes and a scalable lending platform, Finstro is uniquely positioned to provide the necessary working capital to support small businesses, he added.

“Finstro’s platform is built on secure, scalable architecture enabling us to responsibly and efficiently deliver lines of credit to SMEs across Australia with no service interruption from COVID-19 restrictions.

“Fintech lenders have a vital role to play in supporting SMEs through the pandemic and beyond. We are proud to be doing our part in helping the SME community.”

As one of the country’s largest providers of tailored cashflow solutions to SMEs, the appointment of Finstro to the SME Guarantee Scheme further builds on the support it has been offering to the small business community throughout the COVID-19 pandemic.

“We are working closely with our SME clients to ensure they have the flexibility and support they need to keep their businesses going and are looking forward to extending this support to more SMEs through this important program,” Mr Whitworth concluded.

The Coronavirus SME Guarantee Scheme is supporting up to $40 billion of lending to SMEs, building on the first phase of the Scheme which was launched in March this year. Under the Scheme, the Government is guaranteeing 50 percent of new loans issued by eligible lenders to SMEs. The second phase of the Scheme will start on 1 October 2020.