GetCapital is excited to announce its latest strategic partnership with BPS Technology Ltd (ASX:BPS), owner of Bartercard Australia and the world’s largest B2B trade exchange and Entertainment Book.

Under the agreement, BPS Technology will exclusively offer GetCapital’s finance products to its 36,000 members in Australia through a team of dedicated Financial Relationship Managers. This agreement adds to GetCapital’s existing strategic relationships with Alibaba, Aquire from Qantas, OFX and xero.

“GetCapital’s ambition is to be the finance partner of choice for businesses serving the SME sector in Australia,” said Jamie Osborn, GetCapital CEO. “We are proud to attract leading companies servicing this sector and support them in providing a range of finance solutions for their customers.”

As part of the agreement, GetCapital will provide up to $100 million over the initial year of the agreement to support the partnership. Initially, the finance facilities will target growth opportunities as well as working capital finance requirements of Bartercard’s small business members.

“We are excited to add a new business stream to our existing trading arrangements with our merchants, and also our partnership with GetCapital,” said Tony Wiese, Chief Financial Officer of BPS. “We are responding to feedback from our existing merchants requiring better access to working and growth capital”.

Read more about the partnership here.

GetCapital has integrated with Xero and is now available in the accounting software giant’s Marketplace as part of a newly launched Finance category.

GetCapital’s CEO, Jamie Osborn, said the move would support GetCapital’s growth ambitions for its lending operations in Australia.

“At GetCapital, we are passionate about helping fund the growth of small and medium business.  Partnering with small businesses at each stage of their growth trajectory is what we are all about.”

“Being an early member in Xero’s new Financial Services Marketplace will make it easier for the 200,000+ Australian Xero customers to access GetCapital’s services when they need them.”

“Xero customers can now simply link their Xero account to GetCapital and, in doing so, automatically upload all of the business and financial data necessary to assess a loan application and make a faster decision.  The entire application process is online and takes less than 3 minutes,” he said.

Jamie said that access to capital is the primary constraint on small business growth in Australia and business owners are increasingly turning away from banks in search of finance partners that leverage technology to make faster and more accurate credit decisions.  “The market is looking for faster and easier ways to access funding for business growth, and GetCapital is responding.  Our integration with Xero provides speed and simplicity through the application process, while our sophisticated credit models ensure our solutions are tailored and relevant for each customer.”

“Technology alone is not enough.  Small and medium businesses have sophisticated financing needs that often require an individual solution.  GetCapital offers a range of business finance products that our Portfolio Managers discuss with customers to tailor a solution for their specific needs.

“In that way, we like to think GetCapital blends the best parts of the old and new world of business lending. We offer speed and efficiency through our technology platform, together with the good, old-fashioned service you used to get from the business manager at your bank.”

When you’re first starting out with your small business, it can be a little difficult to qualify for a business loan from your local bank. However, there are other ways to get access to the funds you need to support your business through its initial stages of growth. The following 6 small business funding options are some of the most common at the beginning of your journey.

Savings

This is the #1 small business funding option for most people. To the extent small business owners have a nest egg, they will typically use a portion of it before searching for third-party funding.

Tapping into some of your savings is a great way to get started with the clear benefit that it doesn’t have a cost (i.e no interest rate). Of course, the downside is that it is your capital that is at risk and if things go bad its all on you!

Credit cards

Credit cards are the go-to source of funding in the absence of longer tenor debt. According to a 2012 National Federation of Independent Business study in the US, a whopping 79% of small business owners used personal credit cards to start or grow their business.

Larry Page and Sergey Brin used credit cards to fund Google in its infancy and so have many other successful startup businesses. There are of course, also a lot of small businesses that have used credit cards and failed miserably. The credit card option is a good fall-back when no other financing options are readily available. The big downside is that it significantly increases the risk of failure because if you don’t have enough cash flow to meet your monthly credit card payments, things can get ugly very quick – so handle with care.

Family and friends

Do you have a rich uncle? Many startup ventures are funded by friends and family. This is especially true where the entrepreneur has personal experience and a background working in the industry (such as a chef starting his own restaurant) and where the capital cost of the startup is relatively large and not easily able to be financed through other means. If you adopt this route just be sure that your family fully understands the risk in the venture.

Grants

There are a large number of Federal and State grant programs available in Australia for startup businesses. These programs are typically reserved for unique business models and may require a degree of technological innovation from what is currently on offer in the market. They are also notoriously difficult to get. To see an overview of the grants on offer check out Australian government grants:

Bank borrowing

Bank financing is (with the exception of grant funding) typically the cheapest form of financing but also one of the most difficult to get. Most banks don’t fund startups but they will lend against property security so if you own property, you can potentially draw capital from this asset to fund your loan.

Non-bank finance

In Australia there are now a number of non-bank debt alternatives for small businesses. Companies like Silverchef provide funding to small business operators that need equipment finance. In addition, there are a number of operators in the invoice discounting and factoring space that provide working capital solutions for more established businesses. These players include Bibby Finance and Scottish Pacific.

And here at GetCapital we provide a range of business finance solutions to help small and medium businesses fund their growth with the right type of business loans to suit their needs (without necessarily requiring property security).

Conclusion

Getting your financing right for your small business is one of the keys to startup success. It’s not just about the cost of the financing. It’s also about getting the right financing partner who will grow with your business. Most entrepreneurs underestimate the funding they require – so think carefully about both the amount and type of funding you need.

And lastly, good luck growing your business!

One doesn’t typically think of The Australian Greens as being the most pro-business political party in the country. But the Greens small business tax policy – to cut the corporate tax rate on small business from 30% to 28% – is very much pro (small) business. And what’s more, this is really good policy. Small businesses are the drivers of the national economy – a whopping 46% of private sector employment in Australia is from small business. It stands to reason that if you can stimulate this sector there will be outsized returns in an economic sense.

WA payroll tax

Western Australia recently initiated a payroll tax “give back” to small business and whilst it is too early to measure the impact on the local economy, the early signs are that small business confidence is up. The only complaint I have with the Greens policy is that it’s not aggressive enough. It would be good to see Australian small businesses receive a sizeable corporate tax cut to stimulate capital investment and job growth. Imagine the impact of a small business corporate tax cut to 20%! The math is obviously not straightforward, but my guess is that the economic benefit that would flow from business investments would far outweigh the lost revenue in federal taxes.

Around the world, non-bank lenders to small businesses are becoming a force to be reckoned with. In the UK, non-bank lending to small and medium enterprises (“SMEs”) is at its highest in 5 years. That’s pretty remarkable given the contraction we have seen from traditional lenders to the commercial and small business sector. But what is even more interesting is that this story is repeating itself across the globe – small, innovative tech-enabled lenders are popping up everywhere, carving out a niche and offering a competitive lending product to small business. The growth in non-bank lending across the globe is growing at a phenomenal rate and there’s nothing to suggest it will slow down any time soon. We are seeing asset-based lenders, invoice factoring and invoice discounting companies, peer-to-peer lenders, merchant cash advance companies as well as fintech lenders to small business (such as kabbage.com and ezbob.com (which acquired Everline) all growing at very high growth rates. The UK is even seeing the emergence of completely dedicated small business banks to fill the gap left by the high street banks. Aldermore is one of these banks and since opening for business in 2009, has already lent over 1 billion pounds to SMEs across the UK.

Government support

So with all this activity, why is it still so hard for businesses to get a small business loan? Well, the reality is that all these new lenders are only scratching the surface of the latent demand for small business credit. What is needed is for traditional lenders with the balance sheet capacity to really make an impact to small business liquidity, to start lending to SMEs en masse. A UK government program called Funding for Lending Scheme is an innovative example of a policy designed to increase bank lending to small business. Governments around the world should look at this carefully as a model to replicate. The only problem with it? Its too small and not aggressive enough to make a big difference.

Around the world, non-bank lenders to small businesses are becoming a force to be reckoned with. In the UK, non-bank lending to small and medium enterprises (“SMEs”) is at its highest in 5 years. That’s pretty remarkable given the contraction we have seen from traditional lenders to the commercial and small business sector. But what is even more interesting is that this story is repeating itself across the globe – small, innovative tech-enabled lenders are popping up everywhere, carving out a niche and offering a competitive lending product to small business. The growth in non-bank lending across the globe is growing at a phenomenal rate and there’s nothing to suggest it will slow down any time soon. We are seeing asset-based lenders, invoice factoring and invoice discounting companies, peer-to-peer lenders, merchant cash advance companies as well as fintech lenders to small business (such as kabbage.com and ezbob.com (which acquired Everline) all growing at very high growth rates. The UK is even seeing the emergence of completely dedicated small business banks to fill the gap left by the high street banks. Aldermore is one of these banks and since opening for business in 2009, has already lent over 1 billion pounds to SMEs across the UK.

Government support

So with all this activity, why is it still so hard for businesses to get a small business loan? Well, the reality is that all these new lenders are only scratching the surface of the latent demand for small business credit. What is needed is for traditional lenders with the balance sheet capacity to really make an impact to small business liquidity, to start lending to SMEs en masse. A UK government program called Funding for Lending Scheme is an innovative example of a policy designed to increase bank lending to small business. Governments around the world should look at this carefully as a model to replicate. The only problem with it? Its too small and not aggressive enough to make a big difference.