Goldmans joins a host of fintech debt lenders including IFM Investors, Challenger and Revolution Asset Management, with analysts estimating between $ 5 billion and $ 10 billion invested in mezzanine warehouse finance in Australia.
Credit Suisse also supports SME finance and is one of the investors in a recent $ 200 million debt deal from SME lender Tradeplus24, which is based in Switzerland but counts Australia as its international growth market. the fastest.
Biggest competitor Octet, meanwhile, secured a new $ 300 million warehouse last week from three Australian lenders, including four major banks.
Timelio’s funding has grown 300% over the past three years and demand has accelerated this calendar year. Over the past six months, customer demand has grown an average of 15% month-over-month, and a customer’s average funding requirement size has grown to $ 1 million, from $ 250,000 in 2017.
One of its equity investors is Thorney Investments, who also backed the Timelio Capital Fund 2016, which is backed by a group of around 50 high net worth investors and comforted Goldmans on its track record; the fund returned between 7 percent and 8 percent per year. Another investor is Anthony Thompson, co-founder of neobank 86400, which was bought by National Australia Bank this year.
While the big banks have big advantages in accessing finance, “the big banks are very inefficient in terms of technology, but Timelio and others in this industry have built a more efficient machine,” Mr. Thompson.
The technology assesses the risk of debtors and loans against invoices already sent before an SME is paid. Demand is high in the consumer goods sector, where manufacturers often make deals with retailers but still need capital to bring the product to market or import it. Its customers make beauty products, clothing, and new foods and beverages, including sugar-free options, popular in supermarkets.
Blockages in global supply chains due to COVID-19 and the rising cost of freight have provided a tailwind for Timelio as more companies need more funding from the start. But the pandemic has also had a negative impact, lowering the demand for loans in the construction sector.
Mr Thompson said Ms Petris, who runs the business, and her husband Andrew are some of the best entrepreneurs he has seen in the world. “BNPL has changed the face of consumer credit around the world and Australia has been the driving force behind this seismic shift in the way credit is delivered. Now, with Timelio in business loans, we see the technology being used to offer other forms of easy to access (that is) very effective loans for businesses.
The new facility allows Timelio to retain its current flexibility, including financing invoices denominated in foreign currencies to lend to exporters. His fees are a percentage of the financing amount that he says is competitive with bank rates.
With Octet, Timelio competes with ScotPac, which is adopting new technology, and the big four banks. Thorney Investment Group Executive Chairman Alex Waislitz said Timelio “is uniquely positioned to continue to grow as the economy emerges from COVID-19 lockdowns and this new funding facility will help it scale quickly and to satisfy the strong demand that it knows “.
Last week, the Productivity Commission used a research paper on small businesses’ access to finance to highlight significant developments in the SME lending market over the past decade, but said many SMEs are unaware of the options and may not trust new suppliers. “Finding the right product can be difficult, but the benefits can be significant,” said Productivity Commissioner Malcolm Roberts.
Commonwealth Bank has identified the growing desire of SMEs to borrow without jeopardizing the family home and is working with another player, Waddle, owned by Xero, to develop services for the lower end of the market.
“They are waking up slowly,” Ms. Petris said of the big banks. “It’s a niche product: you can’t treat it like a loan. They realize they need the technology and the expertise to understand the space.