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ARTICLE · 18 MAY 2013

The Implications of the Budget on Receivables Financings

Corrs Chambers Westgarth
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The new Budget expects some businesses to pay tax before receiving payment from customers, creating cashflow problems.

AustraliaTax
Rommel Harding-Farrenberg
Rommel Harding-Farrenberg
Simon Reid
Simon Reid
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The new Budget requires certain businesses to pay tax monthly rather than quarterly. This means some businesses may have to pay tax before they receive payment from their customers, creating cashflow issues.

This can be particularly problematic for growing businesses already struggling to pay creditors because of payment delays by their own clients. One solution to such cashflow issues is receivables financings (including invoice discounting).

RECEIVABLES FINANCING

Receivables financings can allow businesses to meet such tax payment obligations as well as freeing up cash for, among other things, working capital, capital expenditure and acquisition purposes and for generally continuing to develop their business without having to wait for debtors to pay invoices. A receivables financing may be particularly relevant where an overdraft facility would otherwise be inadequate. It can be structured to allow increased finance to be made available in line with increased

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