At a time when the GST continues to create a cash-flow crisis for small business, lending experts warn that debt mismanagement is aggravating the problem. However, small organisations have been turning to debtor financing to cope with the cash crunch. Debtor financing has expanded rapidly in 10 years.
Tim Leroy of Benchmark Debtor Finance claims the most common types of debtor financing that small businesses are turning to are factoring and discounting.
The latest figures from the Institute for Factors & Discounters show that total debtor finance turnover in Australia in the past 12 months was almost A$19 billion.
Contributing to this was a March quarter turnover of A$4.9 billion, an increase of 34 per cent on the same quarter last year.
