Total debtor financing turnover in the June quarter rose by 5.7 per cent from March to $15.4 billion, according to information released this week by the Debtor and Invoice Finance Association (DIFA). This included an invoice discounting turnover at $14.0 billion and a factoring turnover at $1.4 billion. The value of total commercial loans rose by 9 per cent, according to the Australian Bureau of Statistics.
A survey conducted by NAB showed that business confidence had risen in August to its highest level since May 2011 due to greater political certainty, a lower Australian dollar and historically low interest rates.
Gary Green, national sales director at Bibby Financial Services, said that small and medium sized businesses are positive about the future now the election is over and that he expected continued growth in the number of businesses using debtor finance to boost cash flows and fund operations.
“In addition to greater political certainty, record low interest rates and the lower Australian dollar are helping to stimulate business confidence and investment, which will add to even greater demand for business credit through the remainder of 2013 and into 2014,” said Mr Green.
Bibby Financial Services also conducted its own survey in July which found 60 per cent of small businesses expect their sales to grow over the next year.
Mr Green said debtor finance is an attractive option for small business as it offers flexible funding, there is no need to provide real estate as security and credit is often approved within 24 hours.
“Debtor finance allows SMEs to leverage their accounts receivables, often one of the largest assets on a business’s balance sheet, and to convert that asset into crucial cash flow. This type of funding can help management save time and focus on growing the business rather than chasing invoices,” said Mr Green.
