Debtor financiers see opportunities

A TIGHTENING credit market provided the perfect opportunity for UK-based debtor finance specialist Bibby Financial Services to enter the Western Australian market, opening a Perth office this week.

Bibby WA state manager, Gary Green, said the strong economy that WA had experienced in the past five years didn't present the right conditions for the company to establish an office in WA, until now.

"Bibby has been looking to enter the Perth market for a while...but the current credit crunch resulted in a perfect opportunity for a new player to enter the local market on the back of major lenders becoming inflexible for financing," Mr Green said.

"Services to the mining industry, recruitment and transport are industries in WA which would benefit most from our facilities in the current climate."

The current market is providing a strong environment for local independent firms specialising in debtor finance.

Scottish Pacific Benchmark founder and CEO Peter Langham said that his company, which was founded in Perth, has been the leading independent in the Perth market and is only going to get stronger in the current climate.

"Benchmark used to be the only major independent specialised player. There is a positive outlook for independents in our industry because the banks are tightening credit," Mr Langham said.

The company has a 15-staff operation centre in Perth, while Bibby's operation centre remains in Sydney.

Mr Langham said he didn't expect more global companies to enter the WA market any time soon, although two major international insurance groups, France's Coface Group and Allianz, both started invoicing finance on the east coast in the past 12 months.

WA is Australia's fourth largest market for debtor finance, accounting for 8.7 per cent of the market and $1.3 billion of sales funded with these facilities in the year to June 2008.

The local industry is currently shared between major players such as Scottish Pacific Benchmark, debtor finance arms of the major banks and several small independent players.

BankWest recently moved out of the sector, forming a referral relationship with Allianz Finance