Author: Darren Tredgold, General Manager at Independent Steel Company
If you work in fintech and your mental image of supply chain finance involves container ships and enterprise ERP dashboards, you are missing the market that needs you most.
I run a regional steel distribution business in South-East NSW. We operate three branches across Queanbeyan, Nowra, and Moss Vale, and we service everyone from farmers building cattle yards to builders working on commercial fitouts. Our world runs on trust, fast turnaround, and keeping the right stock on the ground so local projects do not stall waiting for materials.
But the past five years have turned that simple model into a financial obstacle course. And the tools that could fix it are sitting in the fintech sector, mostly pointed at the wrong customers.
The cash flow squeeze nobody talks about
Here is how steel distribution works in practice. You buy steel from your supplier on 30-day terms. You hold it in your yard until a customer needs it. Then you sell it on 30 to 60-day payment terms to a builder or contractor. So your cash is locked up for anywhere between 60 and 120 days before you see a dollar back.
Now layer on the reality that three quarters of Australian SMEs report dealing with overdue invoices, and that construction businesses are the worst offenders in the country for late payment. One in four large businesses takes more than 120 days to pay their small suppliers. That is not a cash flow gap. That is a canyon.
For a regional distributor, every late-paying customer represents a bigger slice of your total revenue than it would for a metro operation with hundreds of accounts. When a local builder goes under owing you for steel delivered months ago, you feel it immediately. Your own supplier payments, your wages, your freight bills all come under pressure at once.
Banks want your house, not your steel
The obvious answer is to finance your way through the gap. But traditional banks have not caught up with the realities of regional distribution.
Almost all SME lending in Australia is secured against residential property. Steel inventory, no matter how much of it you hold, does not count as meaningful collateral in most bank lending models. The application process takes weeks, requires extensive documentation, and the rates are not friendly. So it is no surprise that the proportion of SMEs turning to non-bank lenders has jumped from 7% in 2014 to 55% in the first half of 2025.
That shift is not a trend. It is a verdict on how poorly traditional finance serves businesses like ours.
The fintech solutions that could change everything
This is where it gets interesting for a fintech audience. The tools regional distributors need already exist in Australia. They are just not being marketed to us, and most of us do not know they are there.
Platforms like Octet have facilitated over $3 billion in B2B supply chain transactions, offering trade finance with up to 120-day terms and debtor finance that advances up to 85% of receivables within 24 hours, without requiring personal property as security. That alone solves a problem that keeps regional distributors up at night.
Then there is the B2B buy-now-pay-later category. Platforms like Butn and Spenda let a distributor offer customers instant payment terms at point of sale while getting paid upfront themselves. The distributor does not carry the credit risk. The customer gets breathing room. Spenda’s payment volumes hit $363 million through Q3 FY25, more than doubling year on year, and its partnership with Capricorn shows this model works in trade supply networks.
On the freight side, digital platforms are starting to address the reality that regional deliveries cost more per kilometre than metro runs. Matching loads with carriers, enabling backload pricing, and offering embedded payment services for freight all reduce the overhead that eats into already-thin margins.
The real opportunity is the last mile of B2B finance
Fintech has spent the past decade chasing enterprise supply chain finance and consumer payments. The gap between a global platform targeting billion-dollar buyers and a steel distributor in regional NSW waiting 90 days for payment is enormous. That gap is the opportunity.
Regional distributors compete against nationals by knowing our communities, responding faster, and carrying stock locally so projects do not wait. But those advantages erode when your working capital is trapped in receivables and your only financing option involves handing over your house title.
The distributors who figure out how to embed trade credit at point of sale, use real-time payment rails for collections, and tap invoice finance to bridge the cash flow gap will build competitive advantages that scale and price alone cannot replicate.
Fintech built the tools. Regional Australia is the market. Someone just needs to connect the two.