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Global invoice finance specialist expands into New Zealand

Published: Thu 25 Aug 2011 12:17 PM
Global invoice finance specialist expands into New Zealand
Auckland, 25 August 2011 ¬ Bibby Financial Services, one of the world¹s largest non-bank specialists in invoice finance has officially expanded into New Zealand this week, opening its first office in Auckland.
Headed by New Zealand National Sales Manager John Blackmore, who has 24 years experience working for non-bank and bank lenders in New Zealand, Bibby will offer specialist invoice finance solutions to small-to medium-enterprises (SMEs), particularly those with an annual turnover of between half a million and $5 million.
According to Mr Blackmore: ³The New Zealand financial services sector has changed since the onset of the global financial crisis. The banks still dominate the market, however the important secondary market has been badly affected with a number of finance companies failing over the last few years. This has created opportunities for new finance companies such as Bibby to enter the market and offer more flexible and alternative forms of funding to small businesses.²
³There are more than 460,000 small business enterprises employing less than 20 people in New Zealand and many have difficulties securing funding to grow or manage cash flow to stay on top of statutory liabilities, wages and funding sales. Some small businesses have no property to borrow against, are fully drawn or require more funds to underpin expansion when new business opportunities arise. Invoice finance will be particularly valuable to these businesses,² Mr Blackmore said.
Invoice finance operates by providing a company with cash flow while waiting, often up to 60 days, for invoice payments. The service typically advances up to 85 per cent of the value of each invoice into cash within 24 hours to help finance the gap between invoicing and payment. Once payment has been received on the invoice the remaining 15 per cent, less a service fee, is returned to the client. Unlike traditional loans and overdrafts, invoice finance does not require property as collateral making it one of the more accessible funding options available to SMEs.
Dun & Bradstreet¹s latest business-to-business Trade Payment Analysis for the June quarter 2011 revealed over 50% of New Zealand firms delayed payments to each other over the last quarter, with an average payment term of 45.8 days. This was nearly two days longer than 12 months prior and indicative of the cash flow pressures many businesses are facing.
Mr Blackmore said that while there are no readily available statistics for invoice finance in New Zealand, he believes less than 5 per cent of businesses in New Zealand are currently using this form of funding, compared to a much higher proportion of businesses in Australia and the UK. He expects New Zealand will follow trends experienced in other markets and uptake will grow significantly. In Australia, the invoice finance sector has grown ten-fold over the last decade.
³New Zealand¹s small businesses are the backbone of the economy. Those that survived the global financial crisis and recent downturn are leaner and meaner and ready to expand. Business confidence is now rising as a result of higher commodity prices, post earthquake reconstruction and the Rugby World Cup, which are likely to support growth in 2011 and beyond. Overall the New Zealand economy remains fundamentally sound and SMEs will be looking to grow over the coming years,² Mr Blackmore said.
³Managing cash flow is one of the most important elements of a successful business and the key discipline of improving cash flow has become an enduring lesson for many companies. Invoice finance has proven to be an efficient, flexible form of funding in other markets, which we expect will be reflected in the New Zealand market. We already have our first New Zealand customer and have ambitious plans for the rest of 2011,² he said.
The new office in Auckland will service SMEs nationwide with a focus on delivering flexible funding solutions quickly and easily, and with a strong personal service ethic.
Bibby Financial Services has a wealth of experience funding companies particularly operating in the transport, labour supply, manufacturing, import and wholesale sectors throughout the world. The UK family-owned business-to-business services group has origins in shipping dating back more than 200 years to 1807. Launching in New Zealand expands Bibby¹s network to 14 countries worldwide, all dedicated to providing specialist invoice finance solutions to SMEs.
Bibby currently advances approximately £700 million to over 5,400 SMEs worldwide and increased its financial support to businesses in 2009 and 2010 during the height of the GFC. Bibby is the largest non-bank provider of invoice finance in the UK.
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