Following the expansion of the initiative, a fintech lender has announced it is now an approved lender in the government’s Coronavirus SME Guarantee Scheme.
Specialist SME business payments provider Finstro can now offer eligible small businesses a Line of Trade Credit with flexible repayment options, including up to 12 months of no repayments. Given its new inclusion in the scheme, the government will guarantee 50% of new loans the group issues to eligible SMEs as long as they are signed up by 30 June 2021.
According to Finstro chief product officer Tom Whitworth, greater access to trade credit is critical to helping Australian small businesses rebound, as it's one of the largest credit forms used by SMEs in the country.
“Trade credit is a key tool of SME cash flow management and has become even more important in the face of COVID-19,” he said.
“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.
“The government-backed Finstro Line of Trade Credit will 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.”
Whitworth also emphasised that, given the group’s fintech status, Finstro is well-positioned to provide speedy working capital to small businesses.
“Fintech lenders have a vital role to play in supporting SMEs through the pandemic and beyond,” he said.
“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.
“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,” Whitworth finished.
