LAST year marked another strong year of growth for Bibby Financial Services (Australia) - Australia's largest independent global provider of cash flow finance.
In 2005, Bibby's Australian client base of SMEs grew by 50%. Further growth of 40% is projected for 2006.
Managing Director Greg Charlwood says the key to Bibby's growth in the SME market is its capacity to be flexible to meet the unique needs of individual clients.
Since 2000, three major factoring companies throughout Australia have been acquired by the major banks, most recently ORIX Cashflow Finance which was bought by the Bank of Queensland.
As a result, Bibby is now the only remaining large, global, independent factor in Australia.
"Because of our independence, we are able to shape our facilities and systems to work for small to medium organisations on a case by case basis," said Mr Charlwood.
"There are rules and regulations in place in the big banks that are difficult if not impossible to bend and this certainly can't be done by customer officers at lower management levels. This can be incredibly frustrating for busy business operators.
"Not only is our product delivery flexible by nature, but our clients also have the advantage of being able to get straight through to senior management if a problem arises, and all are empowered to act."
Bibby Financial Services (Australia) is part of the Bibby Line Group, a family-owned company with origins dating back to 1807 in the UK.
Mr Charlwood said a sell-out to a bank is not on the agenda.
"Our clients don't have to contend with the amount of red-tape they are accustomed to with banks. We intend to keep it that way," said Mr Charlwood.
Mr Charlwood believes the high level of bank interest in the sector is clear indication that factoring will continue to build strongly on its position as a viable cash flow solution.
According to December 2005 statistics released by the Institute for Factors and Discounters of Australia and New Zealand, the number of clients in the sector increased by 9.25% in the twelve months December 2004 – 2005, which accounted for an 18.93% increase in industry turnover (face value of debts purchased) in that time.
The IFD reports the total turnover in 2005 was $37 billion compared with $3 billion only ten years earlier.
In 2000, Victoria's Kenbrock Flooring Pty Ltd owner operator, Trevor J Morris, sought a funding option that would grow with his business. He chose independent cash flow finance over banks on the basis of flexibility.
"Our major assets are stock and debtors, but banks are reluctant to lend on this type of security, preferring to imprison your home instead," he said.
After an initial year of inefficient dealings with another provider, Morris switched his business to Bibby Financial Services. Immediately, he enjoyed the freedom the relationship gave him to concentrate on business growth and profit, rather than spending time managing cash flow at the micro level.
"Flexibility is critical for us," he said.
"As an example, we do container drops once or twice a year. Without a flexible finance source, we could not cope.
"We get 30 day terms from our supplier and we invoice these container drops on arrival. Thanks to Bibby, we can access the funds straight away to ensure our supplier is paid on time."
Cash flow finance with Bibby provides customers with access to up to 90% of the value of accounts receivable within 24 hours of receipt of invoices.
As customers settle their accounts, Bibby returns the remaining 10% (less a fee) to the client.