Bibby Australia

www.bibby.com.au

Bibby Financial Services Australia commenced operations in Australia in November 2002 offering cash-flow solutions to the fast growing small to medium business sector, primarily through factoring and discounting.

However, our ultimate parent company, the Bibby Line Group Limited (UK) has had a much longer association with Australia, dating back to World War I, when the Bibby vessel The Oxfordshire carried sick and wounded soldiers from ANZAC beach, through to 1949 when another Bibby vessel The Dorsetshire carried 550 emigrating passengers from Liverpool to Australia.

The Bibby Group began in 1807 as a Liverpool based cargo service which later expanded into shallow water-accommodation, off-shore oil operations and more recently, financial services.

Bibby Financial Services Limited is now the leading non-bank factoring company in the UK and was awarded Best Factor and Invoice Discounter at both the 2002 and 2003 Business Finance / NACF Awards. The financial services division has grown to comprise 21 companies throughout the UK, USA, Poland and most recently Australia, and has a turnover of £2.2 billion per annum. 

Bibby Australia is proving to be just as successful as its overseas counterparts, and has opened offices in Sydney, Melbourne and Brisbane. 
To date, the industries in which we have had most success in Australia are:

Bibby Australia has grown strongly because it has taken those principles which have made our UK parent so successful and combined them with local knowledge and local people.  In particular, Bibby Australia aims to ensure that both existing and prospective clients deal personally with decision-makers, thus ensuring fast and flexible solutions for their business.

In addition, Bibby Australia has also benefited from a growing awareness among Australian business owners of how factoring can benefit their business.   In particular, business owners are more aware than ever that factoring can provide a line of credit which matches their business cash flow needs, unlike a typical bank overdraft which more often than not is linked to the value of the director’s equity in their house, an asset which has no relevance to their business cash flow requirements. 

Factoring and discounting turnover in Australia has gown very strongly in the recent years.  In the 12 months to 31 December 2003, $23 billion was factored or discounted in Australia, which was an increase of 31% on the prior 12 months.

Factoring in the right solution for your client

By Greg Charlwood, Managing Director of Bibby Financial Services

All businesses aim for a healthy bottom line.  But while it is possible to operate a business at a loss, it is not possible to sustain or certainly to grow an enterprise without a steady flow of cash.

In today’s credit controlled environment, revenue can be delayed for up to ninety days. Unfortunately, SMEs reliant on their existing customers are forced to allow these late payment cycles and thereby tend to fuel an acceptance of the practice.

Factoring offers SMEs a solution to cashflow problems caused by slow paying customers. Businesses can access up to 90 per cent of the value of unpaid invoices within 24 hours of issue.

There are many hidden benefits to factoring.  Knowing the funds are available immediately encourages confidence in decision making, autonomy and flexibility over rigid bank terms, effective time management and bottom line protection.

More and more SMEs are adopting this form of credit management.  As small business in Australia now contributes more than one third of the nation’s GDP and 15 per cent of the export market, it is no longer commercially viable for the sector to carry the burden of late payers.

An alternative is to encourage early payment of invoices by offering customers a discount of up to seven percent.  While effective in the short-term this kind of discounting can prove expensive over the long term.  It also provides little room for business expansion.

For instance, a business that turns over $1 million annually and offers a four per cent payment discount potentially loses up to $40,000 each year. If this amount was recouped and invested at a decent rate of interest over five years, the business could accrue up to $230,000 to reinvest in the firm.

The growth of factoring in Australia (it is already mainstream in the UK and Europe) reflects a need among SMEs for a more flexible financing solution. It is especially attractive to those SMEs with low fixed asset bases or those engaged in the start-up phase of their business.

By allowing businesses the capacity to draw on their aggregated invoice total, factoring is a cashflow facility that is completely aligned with the business’ performance and growth.

Businesses most suited to factoring are those exposed to cyclical demand for outputs, but who must pay large sums for such items as raw materials or import duties, to keep their business operational. These businesses are generally manufacturers, importers, business service providers, wholesalers and fast-growing businesses where the primary asset is debtors.

While the cost of factoring is generally competitive with bank overdraft rates, factoring does not require business operators to offer personal assets such as the family home as security.

Factoring unlocks debtor funds and with that the courage and conviction vital for strategic business development. It empowers businesses to secure competitive trade terms, honour substantial orders, pitch for new opportunities and ultimately grow in perfect alignment with client demand.

Please contact Latham Moore for further information on 1300 733 590 or email us at admin@lathammoore.com.au