As the global economic crisis continues to affect Australian businesses, bad debtors are taking longer to pay and defaulting on debts due to insolvency, according to Oxford Funding.
Research completed by National Credit Insurance (Brokers) P/L in December 2008 has revealed a record 104 claims were made through its services against debtors, a figure 113 percent above average.
Those industries worst hit include mining ($7.46 million in default debts), electrical ($1.28 million), food/provisions ($762 544), and steel ($741 936.)
Oxford Funding – a specialist provider of debtor finance services and a division of the Bendigo Bank – has issued a dire warning to businesses to protect their business from unexpected default.
“It’s obvious that an increasing number of Australian businesses aren’t able to cope with current economic pressures and are defaulting what they owe, said Rob Lamers, Oxford Funding CEO. “Businesses should be looking to insulate themselves from the increasing number of bad debtors in the marketplace.”
Lamers has pointed to a number of strategies businesses can implement to protect their operations from unexpected default. These include debtor finance, debtor insurance, and most importantly, consulting with a financial provider.
“It’s time (for businesses) to consider implementing strategies that can protect cash flow… especially when access to credit is tight.”