Every business needs capital to grow. You have to hire staff, purchase equipment and invest for the future. That need is even more important for small businesses, but for many, capital can be hard to come by.
The Australian Financial Systems Inquiry said lack of capital is a key obstacle for small businesses. Small business loan applications are rejected at twice the rate of larger businesses. When they are approved, they are often saddled with high interest rates, or their family home used for security.
The Federal Minister for Small Business, The Hon Bruce Billson, has flagged the government’s recognition of the challenges identified in the inquiry. “The success rate of small-business finance is on paper quite impressive. What’s not captured is those that say ‘this is just too hard’ and decide to go somewhere else,” Mr Billson said in a speech in May.
The limited access to capital is what spurred us at Xero to look at how we can help. We want to open doors for small businesses to access the financing they need.
New financial services partnerships
We announced three exciting financial services partnerships that are the start of something really special.
For the past several months we’ve been working with Moula, OFX, and CGU Insurance. All best-in-class financial services providers. From today, these partners will tie directly into Xero to offer exclusive features and prices to Xero customers.
The impact of these partnerships is significant. For instance, Xero customers can receive same-day loan approvals from alternative online lender Moula. They can access simpler international payments through foreign exchange platform OFX. Or they can get more accurate estimates for professional indemnity insurance from CGU Insurance. All at the click of a button.
No more fiddly data entry from your foreign invoice summaries. No more guessing about what type or kind of insurance you need. And much less risk that the lender will deny a loan because they have insufficient financial information about your business. All you need to do is provide permission for these services to connect to your Xero. Then they will have access to all the information they need instantly.
The entire process is entirely automated and entirely secure. And we aren’t locking your small business into using these tools. As always with Xero, you can use the tools and services that suit you.
We aren’t working with aggregators, or price comparison websites. Your small business will never receive unsolicited offers. Instead, we’re using our ecosystem to give small businesses access to new opportunities.
OFX and Moula are available to small businesses from today in the Finance section Xero’s Add-on Marketplace.
And this is just the beginning. We’re talking to other financial services providers about how they can help. These three preferred partners are just the beginning. We’re looking at other integrations in the financial services space. We want to open the doors help small business grow.
Do more with NAB
Innovation with our biggest partners is progressing quickly too. In April we announced an industry-first partnership with National Australia Bank. It lets our businesses connect their NAB internet banking products into their accounting dashboard. Instantly. This did away with paper forms and weeks of waiting. It also vastly increased the number of accounts that provide bank feeds – setting the industry standard in Australia.
Our customers love it. We have seen Xero customers link more than 7,000 NAB Internet Banking feeds in just a few weeks.
On the first day of Xerocon we had an announcement from our CEO Rod Drury and Adam Bennett, National Australia Bank Executive General Manager Digital & Direct Banking. Small businesses will soon be able to enquire about new business loans right from within their accounting dashboard.
This means they will no longer have to compile complex, paper-based business financial statements. Instead, all the information NAB needs to approve a loan will be automatically provided through Xero. This reduces the initial loan documentation process for small businesses from days down to minutes.
It’s this kind of innovation that will help small businesses thrive. Small businesses can focus on how that capital will help them grow. Instead of having to worrying about the time it takes to apply for a loan and whether it will get approved. Through Xero and our financial services partners, we can help make that happen.