Bank lending statistics came out recently which showed that businesses were borrowing ~$65 billion less than three years ago. From a “demand” perspective, we know that many large businesses have either shunned debt or preferred to raise capital via the sharemarket. However, there is also a “supply” side to this outcome whereby the credit criteria has tightened – particularly for small and medium sized businesses – which has restricted access to business lending.
Filling the void for SME’s is the debt factoring industry. Factoring companies operate by financing invoices that SME’s have in their Accounts Receivable ledger which are waiting to be paid and represent a source of potential cash flow that the SME can use to drive their business forward. By using products such as invoice discounting and invoice factoring, SME’s can unlock this cash and put their business back on track for success whilst achieving greater peace of mind for the small business owner.