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.”