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Major Invoice Finance Player Returns After a Decade

Major Invoice Finance Player Returns After a Decade

(28 June 2021 – Australia) CBA has ramped up its push to dethrone NAB as the largest Australian business banking lender with a return to invoice financing using Waddle technology.

CBA’s newly released invoice finance product Stream Working Capital lends firms suffering lengthy debtor days 40 to 80 percent of full invoice values while charging interest. The bank set a minimum amount of A$50,000 for outstanding invoices and is targeting SMEs and Lower Corporates with turnover up to A$30 million in the initial roll out of the offering. The Bank assets the product is not be constrained by functionality or funding, providing the potential to service larger sized enterprises in future.

The launch marks a return by CommBank to the invoice financing market since it withdrew in 2011 as the group seeks to compete with major rivals such as NAB and Scotpac. Stream Working Capital is the latest addition to the bank’s burgeoning product and service offering as it seeks to build a “walled garden” of transaction banking and lending products to retain customers by providing a “virtuous circle” of transactions and “home banked” offers.

The invoice financing product will be integrated with accounting software such as Xero with the bank noting it will suit enterprises that do not want longer-term debt and are looking for a solution to short-term cash-flow problems. Since Q2 2019, CBA has added A$12 billion in business lending volumes according to Australian Prudential Regulatory Authority (APRA) monthly banking statistics while Big Four competitors have seen momentum stall, with the group’s business loan book jumping from A$129.5 billion to A$141 billion.

“Large organisations definitely need invoice financing as well. We know that late payments to business is an issue and that goes right across the economy. I don’t think of the balance sheet as a constraint” stated Executive General Manager of Business Lending, Clare Morgan.

“A lot of what I read pits banks and fintechs against each other and I don’t think that’s the right framework. We think that it’s really important that the customer remains in control of their supply chain. The outlook for Australian businesses is bright and CBA wants to ensure businesses are able to access finance on terms that suit them. After all, we are a function of their success. So if our customers aren’t successful, we aren’t either” Ms Morgan added.

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