Why SME Lending in Australia Needs Reinvention

A banker-turned-founder’s perspective on R&D finance, innovation and the capital flywheel

After more than a decade working inside Australia’s financial system, first at Westpac and later at Allianz, helping businesses deploy white-label insurance products.

Supporting over a thousand small and medium businesses during those years gave me a front-row seat to the lived reality of Australian SMEs: unpredictable cash flow, funding bottlenecks, operational complexity and a financial sector that claims to “understand small business” while structurally failing to serve it.

But it wasn’t until the roles reversed, and I became the business owner instead of the banker, that the cracks in the system became impossible to ignore.

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From Banker to Founder: The Turning Point

After completing my MBA at Griffith University, where the program’s focus on innovation, problem-solving and practical application reshaped my thinking, my wife and I opened a physiotherapy practice.

And suddenly, despite 15+ years inside financial services, despite being financially fluent, despite understanding exactly how banks assess risk... Securing funding for our physio practice was a nightmare. The experience was sobering. If someone who understands the system can’t navigate it easily, what hope do thousands of Australian founders truly have?

The more I lived it, the clearer the systemic issue became:

Banks are exceptional at:

• transaction accounts
• merchant terminals
• home loans
• property-backed lending

But when it comes to SME lending, if you don’t have property security and substantial historical revenue, you simply don’t exist.

Traditional lenders speak only one language:

Bricks. Mortar. Tangible assets.

Innovation? Future value? IP? R&D?

They don’t have risk models for those, so they don’t fund them.

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Discovering R&D Finance: A Smarter Capital Model

Frustrated, I began exploring alternative funding models and discovered something rarely discussed in mainstream banking:

R&D financing.

A form of non-dilutive capital secured against a company’s future R&D Tax Incentive refund, an asset recognised by the ATO but largely ignored by traditional lenders.

R&D funding solves a painful problem:

Businesses invest heavily in innovation today but often wait up to 12 months to receive their R&D refund.

For example:

A company spending $1 million on eligible R&D may receive approximately $435,000 back, but that capital arrives long after it’s needed most.

With R&D finance, founders can access that capital within days, not months, allowing them to:

• maintain development velocity
• smooth cash flow
• hire strategically
• avoid equity dilution

That’s when the penny dropped.

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This wasn’t “alternative finance”.

This was innovation-aligned finance, capital that understands how modern businesses actually grow.

So I stepped into the industry, and for the past five years, I’ve helped founders unlock R&D funding as a strategic growth tool.

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Why R&D Lending Works Where Banks Fail

Traditional SME lending is designed around retrospective risk:

Past revenue

Past balance sheets

Past assets

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Startups and innovators operate on future value:

Roadmaps

Milestones

Markets not yet fully realised

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R&D finance bridges that gap by:

• providing non-dilutive capital
• being secured against government-recognised refunds
• accelerating innovation timelines
• smoothing volatile growth periods
• aligning funding with real development cycles

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The real power comes when founders reinvest their early refund back into further R&D, creating what we call the Capital Flywheel:

→ Spend on R&D

→ Access refund early

→ Reinvest into innovation

→ Accelerate outcomes

→ Repeat

This is not just lending.

It’s a compounding system for momentum, velocity and innovation.

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Why Advanced Exists

When I joined Advanced, I saw a business not interested in transactional lending, but in designing a capital platform around the realities of innovation.

What founders truly needed was not:

• rigid loan structures
• slow approval cycles
• annual funding events

They needed:

• flexibility
• speed
• understanding
• capital that evolves with them

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The Structural Shift in Australian SME Lending

We’re seeing three major changes across the startup and SME ecosystem:

1. The Rise of Non-Dilutive Capital

Founders want to preserve ownership and control.

Debt isn’t the enemy. Poorly designed debt is.

R&D funding proves founder-aligned capital is possible.

2. Continuous Funding Beats Lump Sums

Innovation doesn’t happen once a year.

It happens in rapid cycles. Capital should mirror that rhythm.

3. Personalised Capital Is the Future

The next frontier isn’t more products, but smarter capital structures:

• tailored to growth stage
• aligned to milestones
• responsive to real business dynamics

Founders are no longer waiting for banks to evolve.

They are choosing capital partners who already understand them.

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A System Built for Builders

I’ve experienced the system from every side:

• banker approving loans
• corporate building financial products
• founder feeling the funding constraints
• growth partner enabling innovation

And here’s what I know for certain:

Funding should fuel innovation, not slow it.

Capital should unlock potential, not gatekeep it.

Australia has world-class founders.

But brilliance can’t scale if capital moves too slowly to support it.

The future belongs to those who redesign the system, not those who maintain outdated ones.

That’s why Advanced exists.

Not simply as a finance company, but as a growth catalyst.

Not just for funding, but for momentum.

Not just for numbers, but for the future being built.

Fuel for the next generation of Australian innovation.