Octet secures increased $300m warehouse funding facility to support growing demand for supply chain finance

Octet secures increased $300m warehouse funding facility to support growing demand for supply chain finance

Innovative supply chain finance and technology provider Octet today announced it had secured a $300 million warehouse funding facility via a fund managed by MA Financial Group (formerly Moelis Australia) and at least two other major Australian financial institutions, enabling it to meet growing demand amongst Australian businesses for alternate funding solutions, including trade and receivables finance.

The new facility is significantly larger than Octet’s previous warehouse funding lines and reflects growing interest from Australian corporates and SMEs alike in using supply chain finance as a tool for working capital management. Demand for these financing approaches is accelerating, from both domestic and international suppliers, particularly pureplay ecommerce firms, finding that traditional lenders will not give them funding to ride out economic disruption or invest in opportunities because they can’t offer physical securities. At the same time, regulatory initiatives such as the Payment Times Reporting Framework will likely spur additional funding demand from larger companies to accelerate cash flow.

Octet is one of the largest full-service supply chain financiers for SMEs in Australia, with more than 200,000 users in 72 countries now transacting on its innovative and secure platform. Octet supported more than $3 billion in supply-chain and trade finance transactions in FY21, recording a 40% YoY growth in transaction volumes, excelling through the COVID-19 effected period.

Octet Chief Commercial Officer, Brett Isenberg, said the new major funding facility would support growth and client funding flexibility in Octet’s trade and receivables financing portfolio and continued innovation in Octet’s market-leading supply chain technology.

“Managing cashflow has always been a key issue for businesses, particularly SMEs, but financing via the supply chain, as a means for releasing cash and managing working capital, has historically been poorly understood. Now, interest in Octet’s supply chain finance solutions is growing rapidly because companies can see that on cost, speed and service terms, our finance solutions stack up very favourably against traditional alternatives,” said Mr Isenberg.

“COVID accelerated the already exponential growth of ecommerce by forcing more businesses and consumers to move online. With the backing of MA Financial Group and other major financial institutions, Octet’s expanded facility positions us strongly to continue to power Australian businesses with their cash flow and growth ambitions.” he said.

Octet’s finance solutions include Trade Finance, for companies seeking to procure both internationally and locally from suppliers for goods and services prior to shipping; Supply Chain Finance options enabling established buyers of goods and services to pay their suppliers earlier or to access discounts; and Debtor or Receivables Finance, typically accessed by businesses across a wide range of industries as an advance on invoices payable.

Octet also offers a secure, full-service platform for suppliers and purchasers to transact, with advanced payment and real-time FX functionality and in-built protection against fraud and money laundering.

The company plans to launch an Octet-branded virtual corporate card within the next year.

Commenting on the warehouse funding agreement, MA Financial Group Investment Manager, Guy Kaufman said: “We are delighted to partner with Octet in this important initiative, which supports the working capital needs and growth ambitions of Australian businesses by offering innovative funding solutions. In light of current conditions, this is something that is arguably now more important than ever.”

The Payment Times Reporting Framework was introduced by the Federal Government in 2020. The Framework requires all companies with more than $100m in annual turnover to disclose the time taken on average to pay their suppliers’ invoices. The first report arising from the Framework, covering FY21, will be published on 30 September this year.