Not only are debtors taking longer to pay, but a record number are defaulting on debts due to insolvency
Oxford Funding – a specialist provider of debtor finance services and a division of the Bendigo Bank – says that, as the global economic crisis continues to affect Australian businesses, not only are debtors taking longer to pay, but a record number are defaulting on debts due to insolvency.
According to National Credit Insurance (Brokers), in December 2008 a record 104 claims were made through its services against debtors who had defaulted – a figure 113 percent above average and a 136 percent jump from the same period last year.
Worst hit was the mining industry, where $7.46 million worth of debts were defaulted on, followed by electrical ($1.28 million), food/provisions ($762,544) and other steel ($741,936).
“It’s obvious that an increasing number of Australian businesses aren’t able to cope with current economic pressures and are defaulting on what they owe,” says Oxford Funding Chief Executive Rob Lamers.
“This is a trend that’s unlikely to improve in the short to medium term. For their own preservation, businesses should be looking to insulate themselves from the increasing number of bad debtors in the market place.”