Our tips for this financial year

Posted by: Danielle Moore at November 08, 2022

Although we’re seeing high levels of uncertainty in the current market, including increasing inflation and rising interest rates, there’s still plenty of opportunity available. Demand for business finance remains ‌high, with overall loan commitments elevated. According to the Reserve Bank of Australia (RBA), lending to small and medium-sized enterprises (SMEs) increased by approximately 6% over the last year across most industries. Strong growth industries included construction, business services and goods production.

Over the coming year, there are several areas we recommend our clients focus on to navigate the challenges and optimise the opportunities in the current market. It can also pay to consider non-bank lenders, who can quickly tailor lending to different scenarios. They also often value unconventional income or asset structures, unlike traditional banks.

FY23 Top Tips

Here are our top tips for our clients for the rest of this financial year: 

Be creative: Given the complexities of the current market, creativity and innovation in deals are essential. It’s more important than ever for buyers and sellers to be more flexible in their approach and open to new ideas. Many diverse finance options are available to meet the changing market needs for fast, flexible capital.

Assess your capabilities: Determining your internal capabilities and the gaps you need to fill is critical to creating value for your customers. Assess your gaps and be honest about what you need to do to address these. 

Consider your culture: Culture can significantly impact value and talent retention. Recent research identified that almost 90% of divestors believe they could have driven more value from a sale by engaging more closely with the management team. The same report indicated that 82% lost significant value in their latest acquisition because of loss of staff, making it essential to focus on culture, retain talent and identify key person risk. 

Be prepared: If you’re interested in acquiring, it’s critical to be ready and prepared when a deal comes along. You can uncover value and opportunities by scanning the market early for opportunities using advanced planning and heightened due diligence.

Utilise data and insights: You can take advantage of potential value by using internal and third-party data, helping you to develop business insights that can focus your investment strategy to drive the best outcome for your business. 

Reset expectations: We’re seeing a gap between the expectations of buyers and sellers, so a valuation reset is essential for both sides in the current market. It’s also time for a mindset change, switching to a long-term view of value to manage expectations and deliver effective and long-term deals. 

Focus on Environment, Social and Governance (ESG): While ESG isn’t new, it can offer differentiation in a competitive market with a heightened desire for returns. Research by PwC identifies businesses demonstrating ESG capability have a lower cost of capital and a better chance of being prioritised by investors, resulting in elevated premiums. Embedding ESG into value-creation planning is essential. 

Value creation: With inflation threatening company earnings and eroding shareholder returns, it’s important to incorporate innovation and new thinking into your value creation. Consider the effects of inflation on your business growth and operations and re-baseline your value creation plans.

How Rebus can help

At Rebus, we work as your partner, tailoring solutions to meet your short-term and long-term goals. We help to fill the gap between banks and non-banks, helping you to improve your finance structure, consolidate debt and increase your balance sheet efficiencies. 

As funding partners, we can work with a variety of funding partners to help you make sensible commercial decisions based on opportunity and the right strategy for your business rather than a rigid set of criteria more typical of working with a traditional bank.

Given the challenges of the current financial year, acting strategically is critical for many businesses. So get in touch with the team at Rebus today for a no-obligation chat to see how we can help you get ahead of the challenges in the market to get more leverage for your business.