More small to medium enterprises (SMEs) are turning to alternate funding to provide working capital as a result of banks increasing reluctance to lend.

In recent times, there have been reports of small firms facing difficulties in securing the funds they need from banks, whilst others have been hampered by slow-paying customers.

One of the key alternatives to traditional bank lending is Invoice Discounting. Invoice discounting is a form of short-term borrowing often used to improve a company’s working capital and cash flow position. It allows a business to draw money against its sales invoices before the customer has actually paid.

Rather than the SME being constrained by pending invoices, they can now access funds within a matter of days, and no longer have to wait for their invoices to settle in order to grow their business.

The increase in debtor finance is evident in Australia, with over 4500 SMEs using debtor finance. It is currently providing an estimated $7 billion in credit lines to Australian businesses.

If you require any further information in regards to the above article, contact The Quinn Group on (02) 9223 9166 or submit an online enquiry.