There are over two million small and medium-sized businesses peppered across Australia, making up over 97% of all businesses in the country. However, many struggle to survive primarily because of cash flow issues. That’s where B2B funder Butn (ASX: BTN) comes in, helping SMEs manage their finances. 

In Q3 FY24, ending March 2024, the Company has seen growth across its revenue and new registrations. 

Butn’s co-founder and Co-CEO, Rael Ross, said, “Butn continues to deliver growth with quarterly originations of $109.7 million and quarterly revenue of $3.3 million, up 1% and 7%, respectively, on the previous corresponding period. Growth in our platform channel continues, with Q3 originations coming in just 2% lower than Q2, despite Q3 typically being our modest quarter historically. With the current challenging market conditions, these results reflect the continued embracing of our market offering by the SME community.”

Butn is an Australian business-to-business funder that helps SMEs fund and grow their businesses. It focuses on transactional funding, i.e., funding SME businesses through their working capital constraints by financing individual transactions (like paying their suppliers for an order), and leveraging the end debtor’s credit. With the small business failure rate on the rise, it’s more crucial than ever for SMEs to find ways to optimise their business.

In Q3 FY24, the Company’s total net operating cash outflows were lower than the previous quarter. Material operating outflows comprised staff costs of $1.1 million, administration and corporate costs of $0.6 million, product manufacturing and operating costs of $0.6 million, and interest paid of $1.7 million. Investing cash flows included $0.2 million for Butn fintech development and $3.8 million in net proceeds from receivables. 

Butn’s Q3 platform originations exceeded $30 million for the fourth consecutive quarter, up 37% on pcp. The platform business continues to grow its share of originations and revenue as it scales with strategic partners and grows its distribution channels. Deals made through the platform now make up more than 30% of all deals in the third quarter and contribute even more to the total revenue.

Q3 also delivered record user transactions and user engagement for the second successive quarter. This also included strong new user registration numbers, leveraging Butn’s partnerships and relationships. This highlights the growing awareness and utilisation of Butn’s embedded funding technology by the SME community. 

Ross added, “Our operating leverage has had a clear impact on our results, with sustained growth at an increasing margin and tight cost control, leading to a positive Q3 EBITDA result and an increase in our closing cash position relative to Q2. Together with our strategic partners, we will continue to drive our growth further as we look to a strong finish to FY24.”

As of March 31, 2024, Butn had $8.6 million cash on hand, up 35% on Q2. This follows ongoing successful cost savings initiatives implemented by management, which have decreased the Company’s monthly cost base. It gives Butn the financial flexibility to pursue growth opportunities as they arise. 

In keeping with that, the Company has currently announced a trading halt as it awaits a potential capital raise.