It’s that time of year again. Many small and micro businesses are bracing themselves for the Christmas cashflow crisis that typically runs over the months of December, January and February.
The struggle is very real, and if you don’t have plans in place to manage this, it can be a scary time.
“And now, with the ATO crack down on employee super entitlements as well as tax payments – which can be amongst the largest regular bills faced by small business – there is an absolute imperative to ensure that cash flow remains steady,” says Michael Mekhitarian.
“The sad reality for some businesses, is that no matter how well-thought out the pre-planning process is, they will end up cash-strapped simply because they don’t have access to adequate funding. This has long been an issue for SMEs in Australia, and shows no signs of abating as far as the big well-known lenders go, but there are smaller, non-traditional lenders coming into the market and this is good news for small business,” he says.
One such lender is Pickle Money, which as its name suggests, supplies funding solutions to small business to ‘get them out of a pickle.’
“We’re proud to say that we’ve helped Pickle Money with some of its pre-inception strategy and modelling,” says Michael. “We could absolutely see the merit in this idea, and can see that it has a place in the market,” Michael explains.
“The product is easy to apply for and flexible – you can get funds for capital expansion, inventory financing, and cashflow financing for example. And fees and charges are transparent and realistic, and this enables small business owners budgeting certainty in what they need to pay back,” he says.
Launched in September, by property industry veteran Peter Wyszenko and mortgage and commercial broker Ruben Makken Pickle Money is now officially up and running after raising more than $50 million through institutional and private investors.
Pickle Money has a funding pipeline about $150 million, which allows it to offer loans ranging from $50,000 for small businesses and start-ups to over $50 million for larger projects.
“Small business is the backbone of Australia,” says Peter Wyszenko.
“There are some really incredible people doing amazing things. And we know – from history, from experience, from a thousand small business studies, that the first two years are the hardest to stay afloat. We also know that growth spurts can leave a business in a precarious position financially.
“Pickle Money is here to help. To support those businesses to get up and running, and to grow to their full potential,” he says.
“Access to funding has traditionally been a problem for small business, but the landscape is changing. The finance industry is changing and Australians on the whole are becoming more financially savvy. In the coming years there will be many more smaller lenders using various funding models. We’re pleased to be at the forefront of this innovation. And supporting small business is our passion.”
“I’ll be the first to say that you need to be wary of immersing yourself in debt,” says Michael Mekhitarian,
“And that the first step before seeking a loan should always be to revise your budget alongside your plans, giving yourself plenty of time to make appropriate decisions. But I’ve also got enough years of working with small business under my belt to know that while this is wonderful in theory, and not always possible in business. Circumstances change. Every situation is different. And there is not always a textbook solution.
“So, we’re very supportive of Pickle Money because we see such a need for it. For the first time, a lender can provide a true cash flow product, which the borrower is largely in control of, without the excessive weekly principal and interest repayments and stringent terms and document requirements. And many small businesses will tell you this is exactly what they need,” he says.