News Pulse for June 12, 2018

A daily download of SME, startup, fintech and tax news from around Australia.

Facebook is digging into regional ‘goldmine’, says media boss

Southern Cross Austereo chief executive Grant Blackley has criticised Facebook for pushing into regional areas, saying the government should look into the social media platform’s recent roadshow.

Facebook kicked off a series of visits to regional towns in 2018, beginning in Mackay, to discuss doing business online, privacy and other digital matters with locals as part of an ongoing Community Boost program.

Cloud accounting tech startup Rounded raises Series A

Leading cloud accounting package, Rounded, has raised an undisclosed amount of Series A investment to grow its business and gain a more significant market share of the rapidly increasing customer segment of sole traders and freelancers in Australia.

Rounded provides intuitive and straightforward accounting solutions, specifically for sole-traders. The SaaS company, established in 2015 hopes to aggressively pursue its growth strategy, targeting the lucrative and growing “gig economy”, which already boasts more than 4.1 million freelancers and sole traders, or one-third of the workforce, operating their businesses in Australia.

Prospa’s bungled IPO means a VC litmus test remains elusive

It was poised to be a significant milestone for Australia’s ascendant venture capital and fintech sectors. But the bungled IPO of tech-enabled small business lender Prospa turned out to be anything but that.

Prospa last week dramatically abandoned plans to list on the ASX  just 15 minutes before it was scheduled to hit the boards and start trading.

Definitions stall code of practice

ASICAustralian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. asic.gov.au is expected to decide within a month if it will rubberstamp the first serious overhaul of the Banking Code of Practice in 25 years, with most of the wrangling centred on the key definition of small business.

Industry confidence is rising that the watchdog will accept a threshold of $3 million in total credit facilities, beyond which the code’s valuable protections would not apply. According to the banks, more than 97 per cent of their business customers would qualify.

Franchisees need independent umpire

FINANCIALLY struggling franchisees require access to an independent arbitrator to solve disputes with more powerful franchisors, a parliamentary inquiry into the sector has heard. Office of the Franchising Mediation Adviser head Derek Minus told the Parliamentary Joint Committee on Corporations and Financial Services inquiry in Brisbane last week that franchisees usually could not afford to take a franchisor to court when a dispute arises.

“It is all too much for a franchisee who is struggling,” said Mr Minus. “What small business franchisees need is a determination through an independent arbitrator who can investigate and put things on the record.”

Westpac ends Prospa deal as banks plan more unsecured SME lending

Westpac Banking Corp has ended its referral relationship with Prospa, a sign major banks are preparing to ramp up unsecured small business lending to try to regain some of the market that has been surrendered to start-ups.

After Prospa indefinitely postponed its ASX listing last week amid questions on whether its loan contracts breached new laws, the online business lender faces more intense competition from big banks who are developing new products to lend more to small business without requiring residential property to be pledged as security.

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