Would the financial sector offer you the opportunity to build a business? Finance as a business sector is in the growth stage of its life cycle. The analysis firm IbisWorld estimates the value of the industry will increase each year by three percent up to 2019/20. However, it is also a mature industry with a high level of regulation. Here we look at invoice financing.
The Finance in Australia 2014 report predicts there is scope for new products. “New and innovative payment systems are emerging with peer-to-peer lending becoming an alternative to traditional banking,” the report reads.
Neil McMillan at Fifo Capital can attest to the diversification in lending. A key trend in the business finance sector is the move away from traditional forms of borrowing, he says. “More and more SME owners are reluctant to put their house up as security for an overdraft and they are seeking alternative finance options that are less onerous on the business owners. This has spurred the increase in invoice finance which is now a $60 billion industry in Australia and rapidly growing.”
Investing in a financial services franchise can be a highly rewarding venture, he believes. “Exceptional levels of returns and lifestyle benefits mean the demand for these types of businesses is growing faster than ever before,” he says.
“In 2015, we can expect to see more franchisors entering the market and we can also expect to see the existing players significantly grow their brands. Competition between franchisors for new franchisees is expected to increase significantly in 2015 and beyond.”
McMillan explains Fifo Capital is looking at innovative ways to provide funding to SMEs that doesn’t require bricks and mort-ar security but facilitates great returns to its franchise network in a low risk environment.
The IbisWorld report highlights that demand for financial services is linked to economic conditions and the state of the financial market. While many financial service franchises have a niche basis for their business, increasingly we are seeing diversification of the product offer in the sector. Fifo Capital has picked up on the trend.
“Fifo Capital dominates the invoice finance franchise space having been voted the 30th fastest growing company in 2013 by BRW. In response to the anticipated competitive threat, Fifo Capital is looking to expand its product base giving its franchisees more financial products to offer to the market,” says McMillan.
“Now is a great time for anyone to invest into this sector. “The emergence of the alternative finance sector coupled with the anticipated increase in franchise systems has made this the ideal time for potential franchisees to get involved,” says McMillan.