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Bibby announces 50pc funding increase

Bibby announces 50pc funding increase

Debtor finance specialist Bibby Financial Services has increased its maximum funding limit on progress claim finance to $1.5 million.

Mark Cleaver, Bibby’s managing director for Australia and New Zealand, said progress claim finance is relatively new to the Australian market, but has seen a strong increase in demand since the group introduced the offering 18 months ago.

The $500,000 increase to the maximum funding limit represents a 50 per increase on the previously enforced limit.

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“Our lending support has doubled over the past year. By increasing maximum facility limits to $1.5 million, sub-contractor businesses are now able to accommodate larger projects that require progressive payments and entertain faster rates of growth because [of] the injection of working capital,” he said.

Mr Cleaver said that while most of the demand has come from the construction sector, the IT services sector is also starting to utilise progress claim finance.

“Many technology and software businesses have working capital constraints, which means that if they win a large contract, it can place significant pressure on the business from a cash-flow perspective,” he said.

“By accessing funding against progress claims on contracts, these IT companies can entertain much larger projects and manage their cash flow more effectively.”

Progress claim finance provides a form of invoice finance to businesses that engage in contractual projects, with invoices billed on a progressive basis – an area which Bibby said has generally been a challenge for traditional debtor financiers.

“Working capital is important and often under-managed. Improving its performance can generate cash to fund value-creating opportunities,” Mr Cleaver said.

“Funds released through progress finance can be reinvested in ways that more directly affect value creation, such as growth initiatives or increased balance-sheet flexibility.”

Bibby announces 50pc funding increase
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