Fergus launches capital for trade businesses with Stripe

Fergus has launched Fergus Capital for eligible Australian businesses, with the product developed in partnership with Stripe.

The financing offer is aimed at trade businesses with uneven payment patterns. Offers are based on the volume of payments processed through Fergus Pay, the company's Stripe-built payment gateway that lets tradies accept card payments, mobile wallets and contactless payments from customers.

Funds carry a fixed flat fee, with repayments taken as a percentage of sales until the full amount is repaid. Funds can become available within days.

The launch adds finance to Fergus's existing software offering for trade businesses, which includes quoting, scheduling, timesheets, invoicing and workforce tracking. The company operates in Australia, New Zealand and the UK, and says more than 25,000 tradespeople use its platform worldwide.

Access to finance has long been a challenge for smaller operators in the trades sector, where income can vary by project and payment timing can leave businesses covering labour, materials and other costs before customer invoices are settled. Lenders also often rely on extensive paperwork, trading history and security when assessing borrowers, which can make borrowing harder for newer businesses.

Mark Bartels, Chief Executive Officer of Fergus, said the new product was designed around that pattern of uneven income and upfront costs.

"Cash flow is one of the biggest challenges facing trade businesses. You often need to pay for materials, tools or staff before you get paid yourself. Fergus Capital is designed to help bridge that gap, giving our customers fast, simple access to funding when they need it most," said Mark Bartels, Chief Executive Officer of Fergus.

Stripe will determine financing offers using trading activity flowing through Fergus Pay rather than relying only on conventional lending metrics. The approach is intended to reflect real sales activity from businesses using the software and payment system.

Bartels said the partnership could simplify access to funding for businesses whose revenue changes from one job to the next.

"Traditional lenders often struggle to assess trade businesses because income can fluctuate from project to project. By partnering with Stripe, we are able to use real trading activity to make the process much simpler and more accessible," said Bartels.

He said some customers may be able to receive offers after only a relatively short trading history through the platform, reducing the amount of documentation needed compared with more traditional borrowing processes.

"For many of our customers, months of trading history is enough to receive a financing offer. That means less paperwork, faster decisions and more time focused on serving customers and growing their business," said Bartels.

Wider offer

Fergus was founded in 2012 and provides cloud-based job management software for small and mid-sized trade businesses. Its system includes supplier invoice integrations, profit margin reporting, and a mobile app for administrative tasks in the field.

The platform also connects with accounting software including Xero, MYOB and QuickBooks. It also integrates with suppliers such as Bunnings, Reece, Rexel, Tradelink, MMEM, AWM, CNW, Haymans and Samios.

The launch of Fergus Capital extends the company's relationship with customers beyond workflow and billing tools into business finance. For software providers serving small businesses, embedded lending has become one way to deepen product use by tying financing offers to payment activity already handled within their platforms.

For trade businesses, the appeal is likely to depend on whether funding can be accessed quickly enough to cover gaps between paying suppliers and receiving payment from customers. Repayment through a share of sales also means the amount collected can move in line with incoming revenue, rather than follow a fixed repayment schedule.

Bartels said the company sees a gap in the market for finance designed around active trade businesses.

"We are excited to be working with Stripe and expanding our services for our clients," said Bartels. "I am confident it will fill a gap in the market for finance tailored to active trade businesses."