Business Banking Alternatives in Australia: Financial Services for SMEs that You Should Know

While financing your small business may be the most important aspect in which you require financial services for, it is definitely not the only area in which you could benefit from using the right service provider. There many categories which fall under “business banking” or “financial services for SMEs” in which using the best service provider can save you a great deal of money. Oftentimes, the largest and most recognisable financial service provider or bank in a certain domain isn’t necessarily the best to use.

Let’s begin with the countdown of the most important areas for you to improve on as an SME owner or financial manager, specifically tailored for Australian small businesses owners. We have 7 practical tips that should help SMEs save money on banking!

Top 7 Most Important Small Business Financial Services and Bank Alternatives

1. Credit Cards (to make domestic payments)

credit cards

Business credit cards in Australia are also a form of business financing, or more accurately a business line of credit. Normally, they are not the best solution for ad-hoc financing because of their high-interests, but nevertheless – business cards are a (common) form of payment. Small business owners normally pay for the majority of their needs through their credit card, making it perhaps the most usable component of one’s business banking and payment setup, and the question what do they get in return in form of cashback offers or other kickback.

Choosing the right credit card is one of the most significant financial service you could make and over time can save you significant amounts of money. Think of a flat cash return of 0.5% on all your business spending year after year and you’ll definitely save thousands even if your business is quite small in volumes.

The thing with Australian business credit cards is that it’s difficult to understand what’s the actual cashback rate and how does it work. It takes time to go and decipher what’s each business credit card offer – does it vary based on the merchant you are shopping with? how does this card’s “loyalty points” translate into Australian dollars? does the card have any fixed annual costs? what are other perks? does it have a buy now pay later functionality at 0% interest like many of the most popular cards in Australia nowadays? and of course, what’s the interest rate like for borrowing if comes a time in which you will need to borrow money from your credit card.

These are all questions that you as a business owner in Australia should be asking yourself prior to deciding on which credit card to use. Our best guidance in this case would be to make your own research; there was no viable resources we could find comparing the various cashback offers by credit cards in Australia and giving a clear view on which credit card is best for payments.


2. International Bank to Bank Transfers

Overseas Payments

Whether you’re entering into a new international market, paying outsourced employees overseas or remitting money to your suppliers, receiving money from abroad or literally doing anything relating to international money transfers to or from a bank account outside of Australia – you must be familiar with the heavy costs and pains of using a bank!

Australian big banks will charge you through the roof on international money transfers to bank accounts (or from bank accounts to your Australian bank account, if the transferred was made in foreign currency).

While international money transfers appears as if they don’t levy significant costs, this is simply due to misleading and inaccurate advertising. The majority of individuals and small business owners who lack financial education are, unfortunately, not aware of how much exactly they are paying for each transfer, and the actual de-facto fees are high. As high as A$400 on a simple A$10,000 transfer. As high as tens of thousands in fees for a single transaction, if you are making a significant payment or an investment abroad.

On top of expensive international money transfers, banks don’t provide a particularly holistic service for SMEs. While businesses can make international payments abroad, smaller businesses don’t have access to “corporate foreign exchange” which include guidance on forming the right strategy to mitigate risk as a result of Foreign Exchange inflows, hedging tools, and other tools which are widely accessible outside of Australian banks. There are specific services catering for business customers that do offer those for business of (almost) any size that banks love to ignore.

There are bank-alternative international money transfer services in Australia, and plenty of them. The best selections for Australian customers on international money transfers include household names like Australia-headquartered OFX, TorFX Australia, and Wise (a very popular company for money transfers which is also offering an international payments service).


3. Online Banks

While all major Australian banks will give you access to digital banking, moving over to an all-digital “online bank” in Australia may be a way to slash business banking costs significantly.

If you look at a bank like Judo, a bespoke online bank specifically made for small business clients (which is also, in our opinion, the best online bank in Australia for SMEs), you will figure out why neobanks/challenger banks are becoming ever so popular globally.

True for Feb 21 2022, Judo offers a 5 year deposit term netting 1.95% interest p.a. There is probably the most competitive banks of all Australian banks. Other than that they offer a very wide variety of financing solutions for businesses at reasonable rate, and maintain a customer-first approach and hence their 4.1/5 rating on, better than any other bank.

4. Automated Employee Benefits and Insurance


Gone are the day in which your insurance agent was your go-to guy. In a digitalised world, that sort of thing is just not needed. You, or someone from your staff, can take care of it directly with the company. Similarly, employee benefits is something that should not be manually calculated and applied. There are smarter solutions like FlareHR!

FlareHr is an all-inclusive payroll, on-boarding, HR and employee benefits platform. It allows you to look after your workers’ overall wellbeing, by giving you access to discounts from various insurers found on the Flare platform.

The app also allows you to improve your employees’ wellbeing by using the digital on-boarding tool. New employees can find and choose popular worker benefits and other financial products during their on-boarding stage, and this can further help enhance employee engagement and productivity within the company.

Additionally, small businesses can leverage on Flare’s collective purchasing power to provide employees with access to top-of the-range retail discounts and rewards, which are usually reserved for largescale companies.

5. Electricity and Gas

Electricity and Gas

Why not compare electricity and gas providers? You can save up to 50% on your monthly bills with little to no effort and hassle. All you need to do is find an alternative provider and he will take care of the rest!

Make It Cheaper is an Australian-based energy comparison site that checks the rates offered by different gas and electricity service providers across the country. For small business owners, the service has a team of specialists who can help you compare gas & electricity prices from all the available suppliers, and possibly negotiate an affordable deal for you.

So far, Make It Cheaper has helped more than 735,900 homes and businesses in Australia cut their bills by finding cost-effective energy providers. They also have a Do It For You program whereby the company can search for the most ideal energy deal for you, each time that your gas & electricity contract is set for renewal.

6. Point of Sales Systems

When it comes to accepting payments –  Point of Sale systems in Australia are thoroughly covered on our website because they can save merchants a lot of money as compared to lesser alternatives. Since POS systems are so heavily integrated in your businesses processing up to 100% of all customer payments, each 0.1% extra that you’re paying means a direct 0.1% hit on your bottom line profit. Some businesses which operate at insanely wide margins like Restaurants can actually make on break depending on their Point of Sales system choices.

7. Business Financing

If you want to read about the best business financing in Australia, you have come to the right place. Our comprehensive website deals with different means of financing with a particular focus on unsecured business loans (which is the most popular option for small business who don’t have enough of a collateral in the company, and aren’t too fond of providing a personal collateral for financing). Business banking alternatives is our middle name!

Whereas bank business loans are cumbersome, long, and aren’t apt for startup businesses or bad credit ones – online lenders tend to be flexible and understanding, don’t require many documents, and have higher likeliness of approval the loan. So, compare small business loans, research the providers and choose the one that fits your needs.

Loan repayment calculator

More Small Business Banking Innovative Solutions

There are so many additional things that a small business owner has to tackle which consume too much time and should be replaced with innovative solutions. Global FinTech and Australian FinTech are expanding at a very high pace but there are more “old world order” aspects of running a business that should be vastly improved to boost productivity.

Accounting is normally a sensitive for business owners all across the globe. It cumbersome, it is often cumbersome and annoying, and it is incredibly costly. Since accounting is about technicalities, there must be ways to simplify it.

Another prime example is legal support. Currently there are several American startups that deal with simple legal paperwork which is a good start, but this concept can further expand easily. This might be a good time for an automatic translator that will translate complex legal language English into plain English.

Another field that has proved to be problematic is regulation and bureaucracy. Although there are steps in the direction (like the regulatory sandbox by ASIC) this is still the biggest hurdle of innovation, let alone in financial services.

Concluding Words

We hope this small business financial services list has provided you with some insights and understanding of the vast amounts of money you could save if you were to seek (and find!) the right service providers. Business banking is not always best done with the bank.