How context unlocks credit in SME lending

Non-bank lender Bizcap says that while demand for finance from small and medium-sized enterprises (SME) remains resilient, the motivations behind that demand are shifting.

Increasingly, SMEs are not borrowing just to grow, but to manage timing gaps created by regulatory reform, labour obligations and tightening commercial terms. These pressures are exposing the limits of traditional, static credit models.

In response, brokers are adapting, and those that are able to contextualise risk and blend solutions are increasingly unlocking outcomes that others cannot.

“Context unlocks credit,” says Rebecca del Rio, the deputy chief executive officer for Asia-Pacific and global chief revenue officer at Bizcap.

“When brokers really explain what’s happening in a business, it allows lenders and underwriting teams to make better, more informed decisions.

“Ultimately, the best brokers aren’t just submitting deals – they’re framing them. They position the opportunity clearly, align it with the right lenders, and structure funding in a way that works for both the customer and the lender.

“That’s how SMEs gain access to fast, flexible capital, and why brokers remain such a pivotal part of the SME lending ecosystem.”

The shifting needs for short-term finance

A series of regulatory and policy changes are now placing sustained pressure on SME liquidity. One change has been the sharp increase in director penalty notices (DPN) issued by the Australian Tax Office, which make directors personally liable for unpaid PAYG, GST and superannuation obligations.

ATO figures show that issuance of DPNs rose from about 26,000 in FY2023–24 to more than 84,000 in FY24–25.

Alongside this, the introduction of Payday Superannuation from 1 July is expected to reset cash flow timing for employers. Under the changes, super contributions must be paid alongside wages, with funds required to be in employee accounts within seven business days.

For industries with frequent payroll cycles, such as hospitality and trade, this could put additional cash flow pressure on industries with already tight working capital requirements. “I think the Payday Superannuation changes will definitely increase cash flow obligations,” del Rio says.

“They’ve been used to paying it quarterly, and now they’ll have to adjust it to their payment cycle. It’s a big cash flow issue and what some lenders will struggle with is how to price that and assess the risk correctly.”

Del Rio says Bizcap has been investing heavily in understanding how Payday Superannuation affects cash flow profiles, noting that it cannot be assessed through daily closing balance equations alone.

Adding further pressure, many suppliers have shortened payment terms, accelerating working capital requirements across supply chains.

Del Rio says: “Suppliers have tightened their payment terms and SMEs have to adjust to that. If your supplier had a payment term of 90 days and that’s gone down to 30 – that’s a big change.”

Despite these pressures, Bizcap’s data shows many SMEs are still focused on growth. About half of Bizcap loans are used to build or expand businesses, with more than 20 per cent directed towards equipment purchases.

When timing, not viability, becomes the problem

While SME needs are evolving, del Rio says that institutional lending frameworks have been slower to adapt.

Short-term, bridging and non-standard funding requests often sit outside traditional approval processes, even when the underlying business is sound.

According to Bizcap’s own research, 26 per cent of SMEs have dipped into personal savings to keep their business running and 61 per cent of SMEs with borrowing products have abandoned an application due to documentation difficulties.

“That’s a space we play very well in, but others don’t.”

Context is everything

As this environment plays out, context is replacing collateral as the key differentiator in SME lending.

Rather than relying solely on historical financials or asset backing, Bizcap places greater emphasis on understanding what is happening within the business – seasonality, regulatory timing effects, one-off anomalies or growth investments that temporarily distort financial ratios.

Through this lens, the role of the broker becomes even more central. “If there’s a challenging customer, a unique situation, or some out-of-the-box thinking required, Bizcap’s the place to send the deal to,” del Rio says.

“What’s been really amazing to see with brokers is all the additional context that they’re giving.

Brokers as architects, not intermediaries

Del Rio said the growing role of non-bank lenders is also changing how brokers approach deal structuring. Rather than following a linear process - exhausting banks first, then turning to alternatives - many are now adopting parallel and blended strategies.

“Brokers are getting better and better at structuring blended solutions,” del Rio says.

“Combining traditional banks and non-bank funding can often reduce the overall risk. It improves flexibility for the customer and it lowers the overall costs, while still getting the SME exactly what they want.

“I think brokers are so valuable within the market. They have wonderful relationships with SMEs, where often they won’t just go to them for one financial product – it’s a suite. Brokers who understand both sides of the market are uniquely positioned – that’s going to be really important in 2026.”

One product that has been particularly popular in Bizcap’s range is Line of Credit Ultra, which was released in Q3 2025.

A model built for speed

Bizcap’s ability to respond quickly is underpinned by its privately funded structure.

“Being private has been a huge superpower for us,” del Rio says.

“It gives us the discretion to back viable businesses in scenarios where institutional constraints can often limit others.”

Since launching in 2019, Bizcap has provided more than $3 billion globally across more than 66,000 SME loans, approving facilities from $5,000 to $7.5 million – often within hours. Its growth has supported expansion into New Zealand, the UK, Canada, Singapore and Europe.

“Across every market we operate in, SMEs are facing the same issues,” del Rio adds.

“Banks can’t approve with the speed or flexibility businesses need, and that’s where Bizcap’s model fits.”