Leading global debtor finance specialist, Bibby Financial Services - Flexible Cash Flow Solutions observes from the latest RBA data that business credit has increased over the past year.
RBA credit data released recently highlights modest growth in business credit in December after two months of falls. Business credit increased by 0.7% over December, after falling 0.7% in November and 0.3% in October. Over the year to December, business credit has increased by 2.8%.
Bibby Financial Services believes that a further cut in interest rates would help to boost levels of business borrowing, create jobs and offset a slowdown in the labour market.
According to Gary Green, National Head of Sales, Bibby Financial Services, while business credit grew in December, the overall pace of business growth credit slowed in the last few months of 2012, reflecting business concerns about a slowdown in the domestic economy.
Domestic sectors in Australia remain under pressure as households stick to paying down debt or saving. The housing sector could continue to struggle given the climb in the unemployment rate, which jumped to 5.4% in December from 5.1% in January 2012.
Mr Green added that RBA should act decisively to cement an improvement in business confidence and help boost levels of business borrowing, which would benefit all Australians.
Bibby Financial Services Australia grew by 20% pa in 2012 against the backdrop of difficult economic conditions indicating that debtor finance is becoming a more mainstream form of lending to small businesses in Australia. Bibby expects further growth of 20% pa this year. Mr Green noted that given the constraints in obtaining small business lending, debtor finance is increasingly being recognised as a viable and alternative form of lending to the traditional bank loan.