MYOB Invoice Financing Plans Undeterred By Greensill Collapse

As MYOB gets ready to grow into invoice financing for small firms, CEO Greg Ellis contends that the technology firm is not discouraged from Greensill Capital’s downfall, The Sydney Morning Herald reported Sunday (April 11).

“Invoice financing to us is just one execution of managing cash,” Ellis said, as per the newspaper. He noted that invoicing financing is “something that MYOB definitely will be in, and we’ll be in before the end of the calendar year.”

Greensill offered a supply chain financing offering that entailed purchasing invoices from enterprises and providing remuneration to their vendors, which were small companies in many instances, ahead of schedule for a charge. However, MYOB’s invoice financing business model works in a different fashion.

To that end, MYOB serves as a financier that enables vendors to receive loaned funds with their yet-to-be paid invoices as collateral. Companies such as MYOB under that model provide clients with the worth of their invoices less a discount of as much as 5 percent of the invoice’s worth — in as soon as 48 hours in many cases.

Xero, which is a competitor to MYOB, currently provides invoicing financing on the heels of its $80 million purchase of Waddle in 2020.

“We have a competitive advantage over many others in terms of the value of our customer base,” Ellis said in the news report.

Xero CEO Steve Vamos said in an August announcement that the purchase of Waddle was “an important step in our strategy to help small businesses better manage cash flow and gain access to working capital.”

“Waddle’s lending platform has the potential to enable a wide range of banks, FinTechs and other lenders to better support small business financial needs,” Vamos said in the announcement.

As previously noted in this space, cash flow challenges have always been an issue for small companies, but the pandemic period has added urgency to the matter.