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ISCOVER
Staff Reporter
Brokers looking to diversify their core offering could look at branching into debtor finance, according to Liberty Financial.
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The non-bank lender said debtor finance is becoming more and more popular, with the company experiencing a 100 per cent increase in enquiries for its debtor finance facilities.
“Many of our new customers have reported a slow-down in repayment times by their debtors,” Liberty’s general manager business finance Winston Nesfield said.
“This has had a dramatic impact on the health of their business. This obviously places pressure on their business as creditors nevertheless still expect to be paid on time. In many cases these customers have found it difficult to obtain finance from their banks. This combination of slower repayment by trade debtors and tighter credit availability is contributing to higher business failures.”
Liberty’s experience is also supported by recent data released by Dun & Bradstreet showing that trade payment terms reached their highest in ten years in the March quarter of 2011. Small businesses are particularly prone with payment terms now averaging 56.6 days.
“Waiting nearly two months for debtors to pay their invoices is hard for any business to endure. Debtor finance is becoming more popular in Australia and as one of only a handful of non-bank lenders in Australia that offers debtor finance, Liberty provides one of the best funding solutions available to SMEs experiencing these cash flow problems.”
