First Class Financial Group launches product to help solve SME cash flow crisis


First Class Financial Group (FCFG) has announced the launch of its newest venture which is set to boost the cash flow and growth prospects of Australian small-to-medium sized businesses (SMEs). 

Offering specialist lending and financial services, First Class Capital will focus on delivering SMEs with cash flow and working capital solutions.

First Class Capital’s cornerstone product, Sales Plan and Receivables Capital (SPARC), is set to revolutionise the way SMEs trade and how they finance trade receivables.

SPARC is a unique loan product delivering many benefits over those already in the market. As well as providing working capital and sales benefits to clients, SPARC offers supporting credit management and payment processing services designed to allow businesses to maximise cash flow while awaiting client payment.

First Class Capital is predicted to fulfil a huge demand in the market.  More than 35 per cent of Australian SME owners said they anticipated cash flow challenges would hinder investment into business growth this year, in research commissioned last month by First Class Capital.

The research also identified charging clients too little and late-playing clients as key barriers to growth.

First Class Capital CEO, Brad Prout, said many small business owners were unsure of the options available to them in terms of working capital, forcing them to put growth plans on hold. 

“Our research showed more than half of Australian SMEs require working capital to achieve growth this year,” Mr Prout said.

“SMEs are the lifeblood of the Australian economy and its important business owners receive the help they need to run a profitable operation.

“However, existing products do not address the needs of many small-to-medium businesses and only solve part of the problem faced by an SME.  This means a high number are struggling to generate cash flow and, in turn, their businesses are stagnating.

“First Class Capital’s SPARC product delivers upfront working capital. It also arms SMEs with a competitive advantage by allowing the client to offer their customers extended instalment payment terms of up to 10 months.  This is bundled with some very sophisticated credit management and payment processing services to deliver a total end-to-end solution.”

The partnership between Mr Prout, Founder of investment banking business and advisory company, Prout Partners, and FCFG was established in early 2011.

Mr Prout was introduced to FCFG Executive Chairman Clive Barrett, who has a national franchise-based financial services network of over 140 First Class Accounts representatives. 

The First Class Capital product distribution model will also be distributed through a franchise model.   

“Our First Class Capital franchise offer is very attractive and allows our franchise business owners to build a solid lending based business around an innovative suite of products and services,” Mr Prout said.

The launch of First Class Capital has been supported by a vigorous television advertising campaign which has seen more than 100 franchisee enquiries and over 250 client funding enquiries in less than 6 weeks.

With eight franchisees currently operating around the country and a further 12 in the process of gaining accreditation, the former Bankers Trust Senior VP has ambitious growth plans for the business.

“We’re aiming to recruit two to three franchisees per month over the next six months,” Mr Prout said.

“The First Class Capital franchise model is well suited to someone with a business or banking background and who is ready to take on a new venture or seeking to complement their existing income.

“We offer all franchisees initial and ongoing training and access to some very powerful systems and credit management services.  We provide leads and access to wholesale funding in support of the franchisee’s own capital, so that they may build an even larger business. 

“The First Class brand is also very well recognised and our ongoing marketing efforts will continue to support the franchise network.”

Mr Prout undertook twelve months of research before developing SPARC, including a number of focus groups. He said it was clear there was a gap in the SME market for a flexible solution which delivered more than just working capital.

“Most of the products offered by working capital providers were aimed at larger businesses and did not adequately service the SME market,” he said.

“These products provide working capital but no other benefit to a small business.

“First Class Capital provides a complete solution”.