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How one Fintech is bridging the gap between investors and SMEs

Charlotte Petris, co-founder and CEO of Timelio, says her fintech company has come along at the right time. With banks still adjusting to the global financial crisis, funding for small to medium sized businesses is drying up. And for these businesses, managing cash flow now is more critical than ever before.

Timelio is an online marketplace that connects businesses directly with a network of investors providing them with access to fast and flexible growth capital. In effect, Timelio allows them to unlock the cash tied up in their receivables by auctioning off their invoices to institutional investors and high net worth individuals.

Timelio improves cash flow for businesses by enabling them to get paid immediately, without waiting 30, 60 or 90 days for customers to pay.

“Our funding model means we have a more flexible solution to provide more funding to businesses,” Charlotte says.

“We’re seeing huge growth in demand for our service and so proud to have put $100 million of funding into the hands of business owners in just two years.”

Charlotte started the business in early 2015 with her husband Andrew Petris who, like her, is an accountant.

“We met in London when we worked together at one of the banks,’’ Charlotte says. “I worked in corporate finance advisory and Andrew’s experience was in investment management, investing high net worth money into hedge funds and private equity funds. What works best for us, being a husband and wife team, is we also bring very specific skill sets to the business.”

The launch of Timelio’s core product, a marketplace for invoice finance, was a result of their extensive experience in finance and identifying the opportunity to innovate in an industry that has been slow to adopt new technologies.

The flexibility of Timelio’s offering means they also offer export finance for overseas debtors, trade finance, contract finance and staged revenue payments. They fund businesses across a range of industries, from IT, manufacturing and recruitment to those in the food supply chain who sell to the supermarkets.

Growing businesses are the target customers for Timelio’s invoice financing offer. “We’re really focused on helping businesses grow,” Charlotte says. “Because with any business that is growing, they’re taking on new employees, new contracts, expanding production, development, inventory; they can’t do that without some sort of injection of cash flow.”

“This is where our service works really well. As that business grows, our funding grows with them.”

Timelio’s unique and proprietary technology is key to that.

“We use technology to speed up our customer onboarding, risk assessment and data analytics.” Timelio offer a fast, online application and integration with cloud accounting software to enable them to process applications within 24 hours and advance funding the same day.

Timelio’s platform includes an integration with Xero and MYOB to allow businesses to instantly access outstanding invoices in their accounting software and pull these into Timelio’s portal.

This year, Timelio has launched two new products, expanding from its core invoice finance offering. The first is Supply Chain Finance (SCF) which is the invoice financing offer in reverse. Timelio works with large corporates (the buyer) to enable their suppliers to receive early payment. “We seamlessly integrate our purpose-built platform with the corporate’s  systems,  so that the suppliers can access early funding in just two clicks!”

This can improve working capital for both the buyer and the supplier, with no cost for the corporate to implement the program.

They benefit from the increased financial strength of their supply chain and stronger supplier relations.

“In terms of our purpose and our vision, we aim to improve the financial wellbeing of business owners. Both of our funding products enable us to achieve this, in fact, some businesses use a combination of both products for their different customers!” Charlotte says the Supply Chain Finance offer was developed following discussions with corporates wanting to offer a solution for funding their suppliers.

The second new product launched is the Timelio Capital Fund, a managed investment scheme providing sophisticated investors a passive vehicle to participate in invoice finance and supply chain funding programs.

“Our investors are from Australia and around the world,” she says. “They gain access to a new fixed income asset class offering diversified returns.”

“A business will upload an invoice and once approved, it goes live on the platform. Those investors who prefer to invest directly into invoices rather than through the fund are then notified, they login and can fund the whole invoice or a fraction of the invoice. The fund takes an automatic fraction of  every invoice. The whole process is facilitated through our online platform.”

For many SMEs, Timelio offers a service that is better than them going to a bank for funding. If a company is able to receive finance from the bank, they would put all sorts of conditions on it. If the bank decides the customer is too risky or does not meet their long check list of requirements, there will be no funds.

Not so with Timelio.

“With our funding model, we’re automatically diversified through a broad network of investors. The peer-to-peer model is excellent in providing a superior product and customer experience,” Charlotte says.

At the same time, she says the business provides investors with a great alternative, compared to keeping their money in the bank or investing in equities.

“In terms of the sharing economy, there’s a whole lot of people with excess capital and they don’t know what to do with it,” she says. “And there are people on the other side that could utilise these funds to invest in their business.”

“Bringing these people together is a really efficient business model in terms of also creating benefit to the economy. By removing the many hurdles that traditional financial institutions put up, we can help organisations grow, employ and build great businesses again.”

As Charlotte sees it, Timelio fills a gap in the market. Since the global financial crisis, lending to business has been restrained by banks. Directors wanting to get finance would have to put their house on the line. So there’s the problem: SMEs represent 95 per cent of businesses in Australia. They are the lifeblood of the economy and they’re not getting the lending that they need.

“That’s the opportunity. It’s making the process more efficient,” she says.

“We’ve come into this space with a very clean, transparent, ethical approach to this product in the market. And also provide a superior service and experience.” The pricing, she says, varies significantly and depends on the level of risk.

“Typically, we’ll asses the credit risk of the customer, the underlying risk of their business and the transaction and price it accordingly.”

Two years on and Timelio has been voted in the Fintech Asia 100 and has won multiple awards. Charlotte says that’s exciting because it offers opportunity for growth across the Asia-Pacific region. Charlotte says there is a lot of interest from Asia. “Expansion outside of Australia is certainly something we are exploring.”

The Timelio story is remarkable. In just two years, a fintech has come from nowhere and has now carved out a niche and reputation with businesses and investors. And it’s not just small businesses.

They are now funding the whole spectrum of companies and organisations, from SME to ASX listed companies.

Published by Business First Magazine

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