Startup Cape are introducing a new working capital solution in the form of a credit card powered by Open Banking technology and will launch in February 2021. This solution is designed to support the recovery of Australia’s digital/small business community that has been affected by the COVID-19 pandemic.
This type of corporate credit card will incorporate three essential features that will allow digital businesses to better manage their cash flow while accessing finance to invest into growth and will allow for streamlined repayments based on performance through challenging times.
Cape will utilise insights gained from live data sources, courtesy of open banking and accounting, that will unlock access to credit much faster and more cost-effectively through three key features:
- Live credit file management: Given the diversity of small businesses, Open Banking data is essential in allowing Cape to analyse the real-time revenue of its customers and forecast their future performance in order to assess creditworthiness and personalise credit limits.
- Buy Now Pay Later – Cape initially issues limits to act as a float for daily expenses. The Buy Now Pay Later (BNPL) solution is integrated into the transaction feed so that it can be used during or after a purchase to optimise the available balance. Ensuring businesses aren’t trapped in revolving credit facilities by moving purchases not made at the end of the month into the BNPL installment plan.
- Revenue Based Finance repayments: Cape provides a built-in cash flow optimizing feature. When a small business’ revenue slows down, then so do its installment payments – a refreshing, unique solution and friendlier alternative to traditional funding.
Founder Ryan Edwards-Pritchard said “We know already from our work in the fintech and digital sectors that businesses are facing hurdles when it comes to accessing credit having been locked out of business lending, equity investments or simply are nervous about external finance in the current climate. Accessing working capital in the early stages to fund growth is essential but without the right support, many of our SME’s will fail over the coming months and years. Their ambition, energy & creativity extinguished, along with reduced consumer choice and countless jobs. That is why we have designed our solution to help small businesses in the digital community have access to much-needed resources when they need it – not when their bank says they can.”
The Covid-19 pandemic continues to affect Australia’s 2.1 million SME’s that contribute 57% to the country’s overall GDP. In particular, small businesses have been heavily impacted when attempting to access working capital and credit and have become more vulnerable to the ensuing economic downturn.
Edwards-Pritchard continued: “Founders and their businesses face a myriad of spending decisions on a daily basis and they need the flexibility and speed of a funding stream that can accommodate how they work: from an online customer acquisition campaign to rapidly launching a new product to adapt to changing market needs, small business lending is an essential enabler relevant across the lifecycle of a business. Cape’s first product is designed to be more convenient for start-up founders who are searching for a more manageable and tailored alternative to a bank loan, equity investment or personal credit card.”