Defaults up! Small businesses in cash crisis as bad debts take hold
Announcement posted by Oxford Funding (Bendigo Bank) 29 Jul 2009
Worrying signs for small business: new data reveals claims against debtors up 105% since June 2008
Melbourne, 29 July 2009 – The economic crisis is continuing to take its toll on small business with many falling into a vicious spiral of debt as debtors continue to delay payments or not pay at all, cash flow specialists Oxford Funding observed today.
New data released by the National Credit Insurance (Brokers) P/L paints a gloomy picture for small business. In June 2009, claims against bad debts jumped 105 per cent above June 2008 figures, with a record 131 claims made through NCI against defaulting debtors. Worst hit was the building sector, with Building/Hardware recording $2.29 million worth of defaulted debts, followed by Other Steel ($1.45 million) and Fuel Distributors ($506,671).
Mr Rob Lamers, CEO of Oxford Funding, said it was obvious that an increasing number of Australian businesses were not able to cope with current economic pressures and were defaulting on what they owed.
“The financial tsunami has hit small business and it’s now increasingly important for them to keep a careful watch on their customers’ ability to pay,” Lamers said.
“Protecting cash flow is the most important challenge companies face,” he continued. “In the debtor finance industry, it’s no surprise that we’re seeing growth in the uptake of our services. More and more businesses are looking for assistance putting proper credit structures in place, and help with collections processes that can get their cash flowing again.”
Lamers said that Oxford Funding was seeing increased interest in its full-service debtor finance solution – the Partnership Facility. The facility provides flexible debt management and debt collection services in addition to a debtor financing service through which businesses can receive 80 per cent of an invoice’s face value within 24 hours. It permits businesses to essentially wholly or partially outsource their accounts receivables functions.
One user of the service – Evan Tareha, General Manager of Enduro Engineering – said that his company has turned to the facility as a tool for managing debtors during a period of growth. “At Enduro, we’re taking advantage of various opportunities for expansion through projects funded by the government’s stimulus package. As we expand, we’re using the partnership facility to manage our debt. In addition to helping us protect our cash flows, its biggest advantage is that it frees us to concentrate on developing the business, not chasing payments.”
Tareha added that the Partnership Facility’s flexibility is another key feature. “Using the facility, we can make arrangements specific to each of our clients, from the number of days payment can be outstanding, to how Oxford approaches payment collection.”
For those businesses struggling with outstanding debts at the moment, Rob Lamers advises: review your debt repayment schedule and payment terms; invoice on delivery; and follow up outstanding invoices immediately.
-- ENDS –
About Oxford Funding
Oxford Funding, a wholly owned subsidiary of Bendigo Bank (ASX: BEN), is a specialist provider of debtor finance or cash flow solutions to small and medium enterprises. Since its inception in 1994, the company has continued to remain at the forefront of the Australian debtor finance industry due to its flexibility, innovative product portfolio and commitment to best practice service delivery. Oxford is a member of Factors Chain International (FCI). www.oxfordfunding.com.au
Media Contact:
Melissa Shawyer, The PR Group
Tel: 0412 044 048
Email: Melissa@prgroup.com.au
New data released by the National Credit Insurance (Brokers) P/L paints a gloomy picture for small business. In June 2009, claims against bad debts jumped 105 per cent above June 2008 figures, with a record 131 claims made through NCI against defaulting debtors. Worst hit was the building sector, with Building/Hardware recording $2.29 million worth of defaulted debts, followed by Other Steel ($1.45 million) and Fuel Distributors ($506,671).
Mr Rob Lamers, CEO of Oxford Funding, said it was obvious that an increasing number of Australian businesses were not able to cope with current economic pressures and were defaulting on what they owed.
“The financial tsunami has hit small business and it’s now increasingly important for them to keep a careful watch on their customers’ ability to pay,” Lamers said.
“Protecting cash flow is the most important challenge companies face,” he continued. “In the debtor finance industry, it’s no surprise that we’re seeing growth in the uptake of our services. More and more businesses are looking for assistance putting proper credit structures in place, and help with collections processes that can get their cash flowing again.”
Lamers said that Oxford Funding was seeing increased interest in its full-service debtor finance solution – the Partnership Facility. The facility provides flexible debt management and debt collection services in addition to a debtor financing service through which businesses can receive 80 per cent of an invoice’s face value within 24 hours. It permits businesses to essentially wholly or partially outsource their accounts receivables functions.
One user of the service – Evan Tareha, General Manager of Enduro Engineering – said that his company has turned to the facility as a tool for managing debtors during a period of growth. “At Enduro, we’re taking advantage of various opportunities for expansion through projects funded by the government’s stimulus package. As we expand, we’re using the partnership facility to manage our debt. In addition to helping us protect our cash flows, its biggest advantage is that it frees us to concentrate on developing the business, not chasing payments.”
Tareha added that the Partnership Facility’s flexibility is another key feature. “Using the facility, we can make arrangements specific to each of our clients, from the number of days payment can be outstanding, to how Oxford approaches payment collection.”
For those businesses struggling with outstanding debts at the moment, Rob Lamers advises: review your debt repayment schedule and payment terms; invoice on delivery; and follow up outstanding invoices immediately.
-- ENDS –
About Oxford Funding
Oxford Funding, a wholly owned subsidiary of Bendigo Bank (ASX: BEN), is a specialist provider of debtor finance or cash flow solutions to small and medium enterprises. Since its inception in 1994, the company has continued to remain at the forefront of the Australian debtor finance industry due to its flexibility, innovative product portfolio and commitment to best practice service delivery. Oxford is a member of Factors Chain International (FCI). www.oxfordfunding.com.au
Media Contact:
Melissa Shawyer, The PR Group
Tel: 0412 044 048
Email: Melissa@prgroup.com.au