Walking hand-in-hand with innovation, Fifo Capital Australia is revolutionising the business finance sector — with a customer base ranging from SMEs to large corporates.

For all businesses access to finance to support their cash flow and working capital can be the difference to fuel real growth and success. From paying suppliers to getting paid by customers, the cash cycle of a business drives funding requirements. This is where Fifo Capital steps in with a range of innovative finance products for the Australian market.

Launched in New Zealand in 2005, Fifo Capital opened its doors in Australia in 2008 and now runs a team of over 60 franchisee offices throughout the country. The company also operates in Canada, the UK and Ireland. Key to Fifo’s success is that its management team has a wealth of finance industry experience. What they don’t know about the business isn’t worth knowing.

Fifo Capital has scaled up recently

Backed by this experience, over the past two years, Fifo Capital has scaled up considerably, becoming a major player in the business finance space. It has seen them launch a corporate finance side of Fifo Capital, which supports the franchise network, alongside an innovative technology platform. They truly have become ‘fintech with a face’.

Developing networks of intermediaries such as brokers and accountants who can open doors for Fifo franchisees to find potential clients, Fifo’s head office team assist with reviewing applications and the credit side of the business. They charge a percentage of the invoice as a fee for service provided, and Franchisees can invest as much or as little as they want in the transaction. The more they invest, the bigger the potential return. Fifo can also invest in each transaction.

It’s a win all round. The client gets access to innovative finance, the Fifo franchisees get great investment returns.

CEO Wayne Morris has been with Fifo for those two years, and says the company’s readiness to adapt to changing market needs and willingness to try new things has played a major part in its success.

It used to be all about invoice financing

“Fifo provides working capital and cashflow finance for businesses of all sizes, from SMEs right up to corporates,” Wayne says. “Up until a couple of years ago, it was all about single invoice financing. We launched supply chain finance two years ago and trade finance last year. Those products have revolutionised where Fifo is in the finance space. They’re really innovative and have a certain unique quality about them. No-one else can do what we do in this space, the way that we do it. That combination of products has been game- changing for us in the market.”

Despite the fact that Fifo effectively now has two distinct arms to its business — SME and corporate — Wayne is adamant Fifo is not deserting its small business base, but rather experiencing a natural evolution.

“SMEs are still pretty good volume, but we’re now evolving from that small equity base to becoming a large corporate funder,” he says. “In our view, SMEs are the engine room of the country, if they stall, the country stalls. So we’re always going to look after their requirements. But we also want to be in with the corporate world.”

Fifo brings franchise partners in on deals

A key point of difference with its corporate funding is that Fifo doesn’t write its transactions directly into the market, priding itself on involving its franchisees.

“With our corporate clients we only write transactions if one of our franchisees / business Partners is,” Wayne says. “If a transaction comes to us without a business partner, we definitely bring one in. So it supports the network, it works harmoniously with it. If we grow, they’ll grow too.” 

On- or off-balance sheet supply chain finance helps businesses receive payment on invoices earlier, without having to go into debt or provide security. It lets the business maintain its cashflow; while secured or unsecured options allow maximum choice and reduce risk. Plus, it’s fast. At the same their business customers can extend their terms up to 90 days.

Once approved, businesses choose which invoices they want to be paid early using an online platform called STREAM and receive full payment within a few hours. Fifo had seen the product was working overseas so decided to utilise it in Australia. Wayne came out from the UK specifically to develop the company’s technology-driven supply chain solution.

“I’d been running a big tech supply chain company in the UK market, so I knew what we could grow,” he says. “I knew all the pitfalls and the potential income, and we ended up with a product far superior to what we had in the UK.”

Fifo took the same approach with trade finance. This product can be leveraged to pay international suppliers as if they were local, with minimal paperwork and no letters of credit. Suppliers can be paid before the goods leave their country, but the client can choose when they pay Fifo.

“We’ve always said we want to innovate...” Wayne says. 

“For the banks, there are too many restrictions around what they can do. Smaller lenders have got stuck where they are. With the supply chain finance solution, credit insurance and technology, we built those things from the ground up. Having started with a blank canvas we’d been able to listen to our customers and solve their problems.”

Things still say personal

Despite rewriting the finance rulebook and the efficiencies of technology, Wayne says Fifo is still big on a personal, hands-on approach with its clients. He calls it “fintech with a face”. Of course, Fifo’s front line is its franchisees — who don’t necessarily have to have a solid background in the finance industry as Fifo provides some pretty intensive training, both face-to-face and through online webinars. In the marketing space, co-branded literature and web content is made available to brokers.

“We have a very comprehensive training program that starts with a three-day inauguration at head office,” Wayne says. “And there is ongoing support throughout the journey for several months after getting on board. What we’re looking for are people who have the ability to connect with a network. They like people and they want to get involved with really innovative financing solutions. They want to be out there at the forefront of the fintech space.”

He adds that the right franchisee can usually see a meaningful revenue stream within a month or so of coming on board.

“We do a lot of the credit reviews for our franchisees and help them write deals,” he says. “There’s a seven-step process on every deal and if they follow that process, franchisees can be writing deals within their first month or so.” Some franchisees take a bit longer to get grounded with their network, but Fifo maintains its support through regular advice and its website.

“They know they’ve got us to rely on,” Wayne says. “If they’ve got a transaction going on, they know they can talk to us about the deal and get some relevant advice. Then before they fund, or before we fund if it’s corporate, there is more discussion.” However, every now and then, along comes a prodigy.

Beyond a lifestyle focused business

Wayne notes that alongside the evolution of the business, there has been a major change in attitude on the part of Fifo franchisees.

Until a couple of years ago, we were more about lifestyle,” he says. “It was working from home, no overheads and just a few select customers. We’ve moved on from that and most of our team is now more specialised and focused on their returns. Many have been in the network from the beginning and don’t really need support from us on a regular basis anymore. But they’ve almost become brand ambassadors, helping the ‘newbies’ get up to speed.”

Fifo Capital is showing no signs of slowing down their rapid expansion, investing further in customer service and support and continuing the integration of its financial solutions with technology. Their commitment to innovation in business finance has been recognised by the industry.

“We were runners-up in the Fintech Business Awards for lending innovations this year,” Wayne says. “It looks like a good time to grow. There is a bigger demand than ever for our products and we’re committed to taking things to the next level. The scalability is absolutely huge in our business. Roll back five years or so and we were writing deals for $200,000. Now we’re way past $1 billion in funding to the SME community. The only way is up.”

Interested to know more about Wayne? www.franchisebuyer.com.au/fran...