Debtor finance in Australia is growing as businesses feel the pinch from factors such as higher wages and the stronger Australian dollar, according to Oxford Funding.
Oxford Funding head of debtor finance Rob Lamers pointed to the latest Institute of Factors and Discounters (IFD) statistics revealing total Australian debtor finance turnover in the December 2011 quarter was $16.3 billion – a four per cent increase over the preceding September 2011 quarter.
He pointed out that, by comparison, total business credit is rising more slowly than debtor finance, with recent Reserve Bank statistics showing that business credit increased by just 1.4 per cent over the year to January 2011.
Lamers said the growth in debtor finance, particularly in the small to medium enterprise sector, was being driven by an increasing number of businesses looking for a more efficient way to manage their cashflow.
“Factors such as economic pressure from the continued strength of the Australian dollar, high wage costs and interest rates are putting strain on the cashflow of many businesses,” he said.
“Additionally, property assets are not increasing as much as they have historically, so alternatives such as debtor finance – which is not secured by property but by a business’s assets – become more viable,” Lamers said.
Oxford Funding is a wholly-owned debtor finance subsidiary of Bendigo and Adelaide Bank .
