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The use of invoice discounting has increased 28% over the past year, as more Australian businesses use this financial tool to help their cash flow.
According to East & Partners, the value of the working capital finance market in Australia has grown to $36 billion.
New data shows National Australia Bank (NAB) leads the invoice discounting and overdraft facility categories, having increased its share of each sector.
The East & Partners' Working Capital & Receivables Funding Report February 2006 rated NAB's overdraft and discounting facilities number one within the four major banks.
According to the report, NAB's share of invoice discounting rose to 24.9% and overdraft facilities to 26.3% in the six months to February 2006. The bank also grew its share in payables financing (to 14.2%) and inventory financing (to 15.5%).
NAB General Manager Business Financing Products, Geoffrey Summerhayes said the research findings were indicative of the on-the-ground experiences of NAB business bankers around the country.
"We're experiencing strong demand for working capital finance from businesses in the $1m to $340 turnover category. Businesses are increasingly after smart funding solutions that match their cash and revenue cycles.
"Interest in liquidity funding solutions has grown, particularly over the past 18 months. This is driven by businesses that are positioning for growth or simply seeking to be more proactive in their cash management. This is driven by businesses positioning for growth of simply seeking to be more proactive in their cash management.
"We're particularly pleased that businesses are reacting positively to the ease of use and value for money of NAB's overdraft and discounting facilities," he said.
According to East & Partners, many banks are wrapping cash flow financing product offerings into wider their transaction services model particularly for the middle market.
For further media information, please contact:
John Fergusson
BPA Corporate Affairs
National Australia Bank
0407 826 952
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