Taxation Funding (Tax Pay) - Diversified Businesses

Apxium’s ‘Taxation Funding’ Lending Strategy - known as Tax Pay - is a FinTech lending innovation that solves the timing mismatch problem between cash revenues and tax expenses for profitable creditworthy businesses. The solution leverages Apxium’s Smart Payments technology to deliver automated payments on behalf of businesses, direct to their creditors in a wide range of currencies, with customisable approval mechanisms built-in to reduce payment fraud risk.

The genesis of Tax Pay came about through Apxium’s existing Accounting Firm user base (see Professional Fee Funding’ Lending Strategy), who are also the Tax Agents of their clients. As ‘trusted advisors,’ Tax Agents constantly seek ways to assist with cash flow ‘smoothing’ solutions for their profitable, creditworthy business clients, whose revenue cycles do not coincide with the timing of the rigid tax payment cycle obligations imposed by tax/revenue authorities.

These Tax Agents therefore requested Apxium solve this problem through its innovative FinTech lending IP. These relationships have secured a valuable source of proprietary deal flow for Apxium, which is able to leverage these highly credible Accounting Firms as a trusted source to access their most creditworthy clients.

Hence, Tax Pay was born after considerable consultation with Apxium’s Accounting Firm clients. This process revealed significant unmet demand, with the opportunity to work with these accountants to identify high quality businesses that demonstrate strong business models and profitability, but are impacted by working capital constraints and sudden unexpected amendments to tax legislation (often applied retroactively).

The ‘commercial IP’ associated with these Accounting Firm relationships must not be underestimate. These Accounting Firms that Apxium services are well known, highly credible Firms. They are therefore highly selective with the clients they work with, thereby representing a high-quality source of deal flow for Apxium. Combined with their advocacy, Apxium gains much comfort in the quality of referrals, data and transparency. Unlike a broker introducer, these Firms are trusted advisors to their clients and therefore carry reputational risk if they were to refer a client to Apxium with sub-optimal credit default risk.

Tax Pay only focuses on the business clients of Apxium’s existing Accounting Firm clients. Whilst Apxium’s Accounts Receivable Automation Software is not a condition precedent to for these businesses to access Tax Pay, Lenders can take comfort in that only creditworthy business clients of Apxium’s strong Accounting Firms relationships will be eligible.