A nationwide scheme created to help small businesses recover from the impacts of the coronavirus crisis has come to an end at a rather inopportune time – just days before a fresh surge in COVID cases around the country.

With the closure of the Federal Government’s Loan Recovery Scheme on 30th June, Australia’s 2.4 million small and medium enterprises (SMEs) have been left with fewer finance options at a time of already challenging market conditions.

To compound the issue, global capital markets are drying up, the Australian Taxation Office is resuming debt collecting, and businesses are dealing with soaring inflation, skills and labour shortages, and supply chain issues.

With traditional finance lenders such as banks responsible for more than 90% of Australia’s $423 billion in SME loans, and 38% of SMEs having indicated they are actively looking for alternative financing, non-traditional lenders are stepping in to address this need for capital and desire for faster and easier financing solutions.

Among these is Propell Holdings (ASX: PHL), a leading SME-focused finance platform that this week announced it had raised $2.3 million in order to further scale its business through the expansion of its lending book.

Propell CEO Michael Davidson said the capital raise has positioned the company to achieve its goal of becoming cashflow and EBITDA positive in 2023.

The capital raise activities follow a record quarter for the Australian company, which delivered its sixth consecutive quarter of at least 30% quarter-on-quarter customer growth in Q4 FY22.

“We now have over 2150 customers on the platform, compared with 320 at listing in 2021,” Mr Davidson said. “We also announced record lending origination at $3.4 million (up 35% on the previous quarter).”

Propell also continued to make significant developments to its platform during the quarter, completing the majority of its projects on or ahead of time, Mr Davidson said.

The company’s ambition is to become the go-to finance solution for SMEs, he added, with the goal of reaching 100,000 clients in the next five years.

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Reach Markets have been engaged by Propell Holdings Ltd and may receive fees for its services

Sources:

• ASX Announcement, $2.3m raised via Convertible Note
• pc.gov.au, Small Business Access to Finance: The evolving lending market