The small-business lender’s newly launched “buy now, pay later” product, called Moula Pay, is aimed at providing pre-approved businesses to purchase up to $250,000 worth of goods or services as they await payment from debtors.
Businesses are required to repay the balance within 12 months, with the first three months interest- and repayment-free.
Moula Pay is available to businesses with an active ABN or ACN, have been operating for at least six months, and generating at least $5,000 in monthly sales.
The SME lender said the launch of the product is in response to the latest findings of its latest quarterly research, released in August.
According to Moula’s latest SME Payments report, more than half of SMEs, or 56.6 per cent, would consider using a buy now, pay later product for business purchases, with 40 per cent indicating that they would not be able to pay for an unexpected business purchase of $15,000 with their current cash flow.
In addition, 65 per cent of the 500 SMEs said that they are not paid on time, with more than 40 per cent indicating that invoices take more than 30 days to pay, which Moula said “[reinforces] the need for extended payment terms”.
“At the same time, the majority of business owners in the merchant category are struggling to administer extended payment terms in-house due to cash flow concerns, limited credit expertise and prohibitive overhead costs,” Moula said.
The research also found that 49.1 per cent of SMEs would spend more on business purchases if they had additional funds, and 45.7 per cent would be likely to order more stock. Further, 47.3 per cent indicated that they hold back on making purchases when they have insufficient cash flow.
Commenting on the launch of Moula Pay, chief executive Aris Allegos said: “We know how hard it is for Australian businesses to access funding to support day-to-day operations, and there’s opportunity on both sides of the merchant and business customer relationship with Moula Pay.
“Merchants are able to outsource their credit management functions more cost-effectively than typically administering payment terms in-house. They’ve also opened the door to the significant pool of SMEs seeking to spend more on business purchases if they had additional funds and longer to repay.”
[Related: Prospa establishes NZ$45m funding facility]