Financial provider, Moneytech, has introduced a new product called Confirmed Capital, offering funding for businesses starting from $1 million up to $10 million.
Moneytech managing director, Hugh Evans, explained the product was similar to invoice discounting, where either the reseller or distributor could sell them their invoices.
“Confirmed Capital takes us one step further and we’re now competing more against the banks, but we’re doing it smarter and with more technology,” Evans said.
Under the classic Moneytech model, it would lend money from $25,000 to $250,000.
“We’ve seen businesses where to lend them $250,000 was not enough and we started looking at this. It’s also a sign that our business is getting stronger and maturing, and that we can actually do these bigger deals,” he said.
To support the whole project, Moneytech invested $50,000 on computers and related equipment. The product has been in the planning stage for the last 18 months and already has five customers on-board.
Businesses are required to meet a certain criteria in order to access financing such as disclosing the profitability of the organisation, be in business for at least 3 to 5 years, and have a strong debtors ledger. They’re also measured against financial ratios.
“It’s a very clean and efficient way for businesses to borrow money so they can grow,” he said.
Evans said he was also taking the product into other industries besides IT. He indicated it will be funding $250 million into the IT industry this year.
“What we we’re looking at doing is not just about providing funding for the IT industry, but could also fund other types of industries such as manufacturing and pharmaceuticals. Basically any business where they’ve got a strong debtors ledger,” he said.
Evans said banks that offer factoring would lend 80 per cent of the money, but Moneytech will lend 100 per cent.
“As far as we know, we don’t know anyone else that offers the same product in the finance market,” he said. “Banks have really slowed down on their funding for businesses, and there’s a good requirement for funding.”
Down the track, Moneytech is also looking to establish a referral program, offering referral fees of up to $5000.