CBA is starting to roll out a new financial product for businesses in partnership with Xero-owned fintech Waddle that offers to lend money against the value of outstanding invoices.
The product, called Stream Working Capital will be made available broadly this month, after being launched this past June but only offered to selected small businesses.
CBA's executive general manager of business lending Clare Morgan said the bank saw it as providing "digital working capital.”
“It’s about moving away from the more traditional forms of lending and moving towards unlocking some of the value that’s trapped in assets such as receivables and inventory,” Morgan said.
“Stream Working Capital sees us effectively lending against invoices, so businesses are seeing credit limits adjust in real time based on the value of current outstanding invoices.
“It’s transparent, available 24/7 and offers very fast funding, with a turnaround time of 72 hours, compared to an industry standard of several weeks.”
Morgan said the product provided small businesses access to consistent capital that is otherwise "locked up in their invoices, assisting them to pay suppliers or hire employees."
She saw capital access as an "essential part of helping small businesses recover and grow as the economy starts to reopen and businesses navigate this new operating environment.”
Morgan said CBA's own research showed that “uneven cash flow is a cause of significant stress for many businesses.”
The bank’s research also revealed 41 percent of businesses would be likely to use invoice financing if it was integrated into their accounting software.