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Review Your Business Funding Options

by Acceptance Finance

Tuesday, July 12th 2011, 16:34 GMT+10:00
Australia

Although the economy overall has seen some positive signs of recovery in recent times which has been reflected in some  measures of confidence and sales, (small to medium enterprises) SMEs are still facing trying conditions, particularly in terms of accessing funding, low business confidence, increasing interest rates, lengthening payment times, bad debts and business insolvency and cash flow shortages.

Greg Charlwood, Managing Director, Bibby Financial Services Australia, said many businesses are still experiencing cash flow shortages after the global financial crisis.

“Conditions remain tough for Australian SMEs, and despite some positive signs emerging from the economy, there are still many hidden credit risks for businesses including defaults, rising insolvencies, reduced support from the Governments economic stimulus and rising interest rates,” Mr Charlwood said.

Dunn & Bradstreet’s latest Trade Payments analysis report revealed the average payment time in March 2011 rose slightly to 55.6 days, a 3 year high and almost double average terms of 30 days. Without reliable access to cash, slow debtor payments may make it difficult for SMEs to purchase raw materials, meet supplier expenses and – at the simplest level – pay staff wages.

In the current environment, Debtor financing has emerged as an important funding tool with firms with cash flow pressure and are seeking a flexible line of credit to support sales growth. Many owners and managers are struggling to secure a flexible, affordable form of finance from traditional lenders and are seeking other ways to obtain finance.  clients are utilising Debtor Finance to smooth out cash flow hiccups or sales seasonality and make use of a comprehensive account receivable service to free up time to focus on other management issues. Despite the GFC, many, particularly wholesalers buoyed by the stronger AUD are also experiencing positive sales growth and require the additional working capital to maintain growth and expand.

 Furthermore, the GFC has also required many SMEs to restructure their finances, and many have used Debtor Finance to release security for other uses (no real estate security is required for a Debtor Finance facility), to clear ATO payments or to replace or pay down traditional loans and overdrafts.

Once again professional advice  is crucial to a achieving the right solution.

John Murphy
Phone: 9854 3586
Email: jmurphy@acceptancefinance.com.au

Bibby Financial Services

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