The last two decades has seen a dramatic shift in the financial landscape for ASX listed companies, where businesses are beginning to recognise outdated financial structures offered by conventional, institutional lenders and the processes involved which create barriers for future growth.
Professional service providers must understand the current financial challenges in order to respond and adapt accordingly to business needs, paving the way for new and more efficient strategies to be implemented. In the interest of competitive advantage, it is increasingly important for accountants, financial advisors and stockbrokers to maintain strong relationships with their clients and stay abreast of tools and services which promote financial efficiency.
Here are three major financial challenges and solutions to consider as a professional service provider if you are looking to enhance the value of your business and professional relationships:
Time consuming and inefficient funding processes
It is no secret that the ‘big four’ lack the efficiency and effective communication methods of smaller, agile, alternative lenders.
When engaging traditional methods of funding, ASX-listed businesses and senior personnel often experience all-consuming, lengthy processes which take months to fulfil and sometimes even longer to actually gain access to funds. This can be disruptive for marketing or capitalizing on business growth opportunities, acquisitions and other strategic company initiatives, where in the time it takes to actually receive funding, the opportunity has passed. Obtaining funding from traditional lenders also requires business executives to prepare copious amounts of documentation and pitches, taking up valuable time and reducing company productivity, especially during periods of growth.
ASX listed businesses need a funding mechanism that is fast, efficacious and non-combative, that ultimately produces fast funding which does not strain the management nor the productivity of an organisation. Analyse the effectiveness of your financial partnerships and/or lending sources:
- Are they aligning with your business objectives?
- Are they providing you with a concrete timeline of funding?
- Are there any future implications or costs for your business?
- Do they promote business efficiency?
Ultimately, one of the more attractive options is to engage a non-bank funder; much smaller organisations with less bureaucracy, enhancing the efficiency of their work and communication with borrowers. Non-bank lenders such as ORB Alternative enable a simple process of an online application and a response within 72 hours.
Lack of visibility of broad market alternatives for capital
Professional service providers currently have a very limited scope of visibility of the market alternatives for business lending due to the traditional banks having a significantly ‘louder’ presence in the market.
Obtaining funding may also be a restrictive process internally as there might be a preference for sticking with an already existing inefficient bank partner.
Gain insight from your network and channel partners and their experience with alternative capital. As a professional service provider or financial decision maker of the business, ensure you have established transparent relationships within your financial partnerships. Put in place agreements which ensure you are preserved in the relationship with the client and economic benefit of the lending outcome.
It is essential to find a financial and/or lending partner that provides access to an aggregated portfolio which opens a panacea of available options.
Mismanagement of criteria and expectation for business loans
Communication processes with traditional banks have shifted from a relationship-based model, to now a strict criteria heavily invested in bricks and mortar models. The reality is, businesses are not bricks and mortar but rather, are ever-changing, growing organisations which have key measurable results (including EBITDA and liquidity).
In addition to this, there is often not a seamless path from beginning to end as financial institutions have not matched nor adapted effectively to management funding according to business requirements.
Bricks and mortar is simply not the correct measurement of the performance or credit worthiness of a business. There are multiple non-dilutive, alternative lending solutions which enable funding for businesses who may not even fit traditional lending criteria. ORB Alternative products including ORB Alfa, ORB Alfa Plus and ORB 2020 offer converting notes, senior debt and equitable mortgage solutions for ASX listed businesses as opposed to traditional criteria.
Most importantly, professional service providers need to recommend funding pathways that are fast, simple and flexible, aligning with the goals of the business.
ORB Alternative is here to assist professional service providers overcome financial challenges their clients or businesses may be facing, whatever the catalyst or scope may be.