With insolvencies on the rise due to the Australian Taxation Office’s (ATO’s) toughened approach on debt collection, more businesses are considering the benefits of factoring compared to the traditional forms of cashflow finance.
Greg Charlwood, managing director Bibby Financial Services Australia, , says Australia is starting to adopt factoring, renowned in Europe, as a mainstream form of cashflow finance.
“Many businesses, regardless of their capital value, struggle to meet running business costs such as tax, rent and staff that require prompt settlement.
According to Charlwood, a growing number of SMEs across multiple sectors are turning to factoring to avoid the significant pitfalls of catering to late paying customers.
Figures from the Institute for Factors and Discounters Australia and NZ show that factoring and discounting grew to $4.9bn in the quarter to March 2003, an increase of 34% for the same quarter in 2002.
