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Uncertain business conditions create opportunity for brokers to deliver higher-value SME guidance

Earlypay

An uncertain economic environment and conflicting financial indicators are providing commercial finance brokers with the opportunity to give more value to their clients by holding proactive working capital conversations, suggests invoice financing specialists Earlypay.

Economic uncertainty is showing up in the numbers. For example, CreditorWatch reported insolvencies fell 3.9 per cent in FY26, yet trade payment defaults and ATO tax debts are rising again. Insolvencies in Transport, Postal and Warehousing increased 14 per cent as fuel costs, higher interest rates, competition and weak pricing power squeezed operators.

Earlypay chief executive James Beeson said the uncertainty and conflicting business indicators should prompt brokers to look beyond a client’s immediate finance requirement and think broader to consider whether their working capital position is ready to support what comes next.

“With the ongoing uncertainty around geopolitical events, oil prices and interest rates, there is a lot that business owners and their advisers can’t control. So, it’s more important than ever to manage what they can control effectively,” Mr. Beeson said.

“That means forecasting the expected demand for their products or services as accurately as possible and then considering the working capital impact of generating those sales. 

The best way to understand the working capital requirements of a business is through the cash conversion cycle which is the time between cash leaving a business to pay for inputs like stock and operating expenses and returning to the business as customer receipts.

“The cycle starts when you pay a supplier, continues while stock is shipped, stored or turned into a product, and ends when the customer pays the invoice,” he said.

The longer the cash conversion cycle is, the longer a business is out of pocket and the more working capital it needs to support that cycle. 

Helping SME operators understand the cash conversion cycle is a major opportunity for brokers and accountants to add value. It often identifies the root cause of working capital issues, whether it’s due to large supplier deposits and long lead times, carrying too much inventory or long payment terms from customers. 

Once the root cause of working capital challenges is identified, brokers and accountants can recommend value-added solutions to ease cash flow pressure for otherwise successful businesses. The sooner this conversation happens, the better, as alternatives often become more limited when the funding need becomes urgent.

These conversations are where brokers add real value for business operators which support long-lasting trusted relationships. In an increasingly competitive finance broking environment, it’s the brokers that think holistically and from a different perspective that will differentiate themselves.

In addition to the geopolitical uncertainty, several recent changes are increasing pressure on the working capital needs of SMEs. From 1 July 2026, Fair Work increased minimum wages by 4.75%, and the introduction of Payday Super brought forward the timing of superannuation payments. The reinstatement of the federal fuel excise on 2 August has added further cost pressure, pushing fuel prices higher for businesses and consumers. Against this backdrop, understanding the cash conversion cycle and having a clear working capital management plan should be a priority for all SMEs. 

Mr. Beeson said the uncertain business conditions create an opportunity for brokers to play an even more important role as part of an SME’s broader advisory team, working alongside accountants to help clients understand existing and future working capital challenges and the best funding options for their situation.

“In a world where there is so much that SMEs can’t control, brokers that support SMEs by providing value-added guidance around working capital will differentiate themselves from those that remain focused on simply funding the next asset purchase.”

 

About us:

 

Earlypay Limited (ASX: EPY) is an Australian-listed lender which delivers flexible working capital finance solutions Australian businesses can rely on.

 

Earlypay has supported thousands of Australian SMEs for more than 25 years through solutions such as invoice finance and equipment finance - helping them improve cash flow, unlock capital and access a broader range of assets with confidence.

Contact details:

Mark Eggleton

New Romans

0430 095 111

[email protected]