Exclusive: Invoice financing is ready for reshuffle
Data from the Reserve Bank and the Debtor and Invoice Finance Association suggests that invoice finance volumes represent 3.9% of GDP in Australia. Still, that figure is tiny compared to 19% in the UK, according to Australian Invoice Finance.
Speaking exclusively to My Business, Greg Charlwood, finance veteran and co-founder of Australian Invoice Finance, said the reason appears to be a lack of interest in Australia’s banking industry to support SMEs.
“I think most of it is because UK banks are much more involved in bill financing than they are in Australia,” Charlwood said.
âThe banks there seem more mature in this regard and they are ready to finance SMEs, while I don’t think Australian banks are so inclined to finance SMEs.
“During the financial crisis, the bank in the UK continued to lend – on the contrary, it increased the level of lending [to SMEs] – whereas here in Australia the banks tended to go out of business and make it much more difficult to borrow money, and in fact called up a lot of loans.
In launching Australian Invoice Finance, Mr Charlwood said that he and his business partner Greg Woszczalski – who together founded Bibby Financial Services Australia, 180 Group and ORIX Cash Flow Finance – aim to give SMEs more choice when they it is about raising their capital. requirements and provide a higher initial level of funds than established competitors, up to 85 percent of the invoice value.
âMany companies find that financiers do not support them when they encounter difficulties. We support them through difficult times and will seek to support clients who are restructuring or turning around their business, âsaid Charlwood.
A July report from payment provider IntegraPay found that business owners spent an average of eight hours per week – or 52 business days each year – chasing and collecting late payments, underscoring the severity of cash flow constraints. on the growth of the company.
According to Charlwood, more lenders in the small business space means more choices for business owners, as well as a larger pool of funds with which to meet cash flow needs.
âIn recent years, there has been a lot of consolidation [in the invoice finance market], and two of the major players, namely Scottish Pacific and CML, each acquired three other bill finance companies. So this has created a situation where the market is really asking for other offers, âhe said.