Access to credit, slow trade payments and business cash flow are still some of the chief concerns for SMEs. According to Dun & Bradstreet’s most recent Business Expectations survey (June 2010), 21% of Australian businesses reported they had less access to credit then compared to the previous quarter. Lending criteria from the traditional big banks remains tight, particularly for the small business sector, which many believe is yet to experience the recovery witnessed by their medium and large enterprise sector.
The most recent trade payments analysis from Dun & Bradstreet for March 2010 also noted that the average debt payments were increasing to 54.1 days, an increase on the previous quarter. Approximately 46% of businesses surveyed indicated they were being negatively impacted by lagging business to business payment terms, a 10% rise since April 2010.
Late payments can cause a range of issues for the business, including preventing the company from purchasing new stock, maintaining their tax position and threatening supplier relationships.
As we commence a new financial year, having access to a flexible source of funding will be critical to supporting a revival in the SME sector, helping SMEs manage cash flows, fluctuating demand and expenses and capitalize on growth opportunities as they arise.
Debtor finance is one of the most accesible forms of funding available to SMEs in the current climate. To discuss how debtor finance or inventory finance can benefit your business, contact one of the mortgage brokers at Intellichoice on 1300 55 10 45 or visit www.intellichoice.com.au for more details.
