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Tough conditions increase businesses? exposure to bad debts

Staff Reporter 1 minute read

Over a third of Australian companies have exposure to debts that are unlikely to be repaid, according to a business survey released by Veda Advantage on Friday.

The survey of 202 business owners and executives found that due to tighter financial conditions 40 per cent of respondents claimed to face the prospect of non-repayment of large debts.

Of those only 40 per cent had put steps in place to reduced the impact of that bad debt.

More than one third of the businesses said they had also been affected by liquidity and cashflow issues in the last year; with 58 per cent unable to expand, 47 per cent unable to meet bills on time, 36 per cent applying for short term credit and 12 per cent unable to pay employees.

Despite increased debt exposure and cashflow issues 61 per cent of respondents claimed that the recent financial uncertainty had not inhibited their businesses from investing in new projects.

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Published: 03-11-08

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