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Michael Davidson, CEO, Propell. Image supplied by Propell.

Propell 101 Guide to small business finance: Understanding your options

As businesses begin to recover from the pandemic, there are a range of traditional and non-traditional sources of funding they can access.

In response to the concerning statistic that 60 per cent of SMEs don’t know what financial options are available to help them rebuild, Aussie fintech Propell has released a free 101 Guide to small business finance. Dynamic Business provides an excerpt from the Guide that covers two options, Crowd Funding and By Now Pay Later (BNPL).

Propell 101 Guide to small business finance: Understanding your options


Useful For:

Start-ups and entrepreneurs can struggle to access traditional types of business finance because they can’t find a lender willing to take a risk on them. With crowdfunding, a large group of people pool small amounts of money to fund the business’s project without relying on traditional lenders.

What is it?

  • A way to fund projects that traditional lenders would find too risky. 
  • A group of people invest money, usually to get some sort of return or incentive for their initial investment. 
  • Crowdfunding is a creative way to access funds from peers such as directly from your targeted customer base, other businesses, private investors, or friends and family.
  • There are multiple crowdfunding platforms on the internet to showcase ideas and raise funds.

Crowdfunding via Securities promises investors a form of ownership of the business in the future, such as shares, or other security issued by the company.  

Crowdfunding via Donations is when money is raised through handouts. People generally don’t expect a return for their charity. Family and friends may be more open to donating to your cause than the general public — especially if your cause is business-related rather than for charity. 

Reward-based Crowdfunding is when people invest money to secure a reward in the future. An example of this is when a business raises money to release a new product. Once the money has been raised, and the product is developed, the investors receive the product in return for their investment. 


  • You can raise money for your business even when traditional lenders have knocked you back.
  • With crowdfunding being predominantly performed online, it allows a business or entrepreneur to build hype around their idea and can provide marketing advantages. 
  • This form of raising funds is mostly unrestricted, so you can be as creative as you’d like when coming up with a crowdfunding strategy. 
  • Social media integrations are available for social shares and the ability to “go viral”.


  • Platform fee. Many platforms charge a percentage of the amount raised. This will either be a flat rate charged per pledge, a percentage of the amount pledged, or a mix of both. 
  • Payment processing fee. A payment processing fee may be charged on each pledge. 

Watch Out For

  • The amount of finance you may be offered directly depends on the value of your unpaid invoices. You will generally be able to get between 80% to 90% of the invoice value as an advance. This may not be practical for businesses needing higher loan amounts.
  • Clients not paying their invoices can impact the terms of your invoice finance. If your customers do not pay their invoices, the invoice finance provider may charge a higher advance fee to cover the costs of missed payments. 

Payment Solutions — Buy Now Pay Later

Useful For

Buy Now Pay Later allows you to purchase goods — whether inventory, tools or parts for your next job — and pay them off over the following few weeks or via monthly repayments; essentially, eliminating the need for business finance, in some cases. 

We all know we can use services like Afterpay and Zip Pay as consumers, but it can also be used for business purchases with services like Zip Business Trade. 

BNPL provides an efficient platform for your customers to pay you. Providing easy payment options means you could receive payment earlier than you otherwise would. 

What is it?

  • You can easily sign up to Buy Now Pay Later services online without using your assets as security.
  • When you pay with BNPL at participating retailers (and wholesalers), you purchase the goods but defer payment — exactly like the name suggests; you buy now and pay later. 
  • Payment for the goods is made in instalments over the coming weeks. Often, the instalments are broken down into four equal payments. Or you can use it like a line of credit and make monthly repayments. 


  • You need to purchase some tools to complete the next job you’ve got lined up, however, you’re not expecting payment from previous jobs for at least a month. 
  • Rather than applying for a business loan, using a credit card or drawing down your line of credit, you apply for BNPL.
  • The tools cost $1,000, which you pay for on BNPL. 
  • You take the tools home today and your payments are broken up into four $250 weekly instalments.


  • Most BNPL providers do not charge interest, so it’s basically interest-free credit. 
  • The set up and approval processes are extremely easy providers do not need any assets as security.  
  • It may be an adequate alternative to a credit card for many people. Plus, you avoid huge interest rates that can come with credit cards. 


  • Late fee. If you make a repayment late, you may be charged around $5 to $15.
  • Account-keeping fee. You may be charged a monthly account fee. With some providers, this depends on the balance of your account each month.
  • Payment fees. Some providers may charge a small amount each time you make a payment.
  • Establishment fee. Many providers don’t charge anything to set up your account, however, others may charge a fee.
  • Merchant fee. When you offer BNPL as a payment option for your customers, you will be charged a merchant fee. The amount depends on the length of the interest-free period you offer to your customers.
  • Transaction fee. Each time a customer pays with BNPL, you will be charged a small transaction fee. 

Watch Out For

  • Missing your payments could see a red mark placed on your credit report which may impact your ability to apply for credit in the future.
  • If you’re looking to apply for a loan, lenders may assess any outstanding BNPL amounts in a similar way to how a credit limit is treated. This applies to all forms of credit however many people don’t realise that BNPL can impact their ability to borrow money. 
  • While late payment fees might seem like small amounts of money, they can certainly add up quickly if repayments are continually missed.

To download the full guide, click here.

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Clare Loewenthal

Clare Loewenthal

Clare is an author, business commentator and passionate contributor to Dynamic Business. She was the Founder and Publisher of Dynamic Small Business magazine, which became Australia’s largest small business publication.

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