Debtor finance specialist Bibby Financial Services has launched a trade finance solution for small and medium enterprises (SMEs) that need to purchase goods for which they have confirmed orders.

Australian businesses are missing out on trade opportunities because of cash-flow challenges or bank security requirements, says Mark Cleaver, managing director of Bibby Financial Services Australia and New Zealand.

"With our trade finance solution, businesses can now confidently explore opportunities with local and international suppliers and significantly enhance their buying power," he adds. "The solution couples a purchase facility to cover the upfront costs of an order with an invoice finance solution, which provides an advance against the customer invoice, part of which liquidates the purchase facility.

"Unlike the typical letter of credit or business loan, Bibby's trade finance facility does not require real estate security and the funding is scalable - growing in line with sales and orders." Cleaver says the new trade finance solution will benefit importers, for whom the falling Australian dollar is causing margin pressure.

Unlocking additional buying power can help support import businesses with the opportunity to secure goods at more favourable exchange rates or where there are discounts available, he adds.

"By financing trade purchases, Australian businesses can achieve preferential status with suppliers, pursue larger and higher margin opportunities and maintain a healthy cash flow. Trade finance significantly reduces credit risk and the impact of a long buying cycle, particularly common with importers," he notes

Bibby is now seeing an increase in SME borrowing activity after several years of below-trend growth.

Cleaver says a third of businesses are borrowing to fund growth and more than one in five will borrow to fund innovation projects. "Both indicators have increased from July 2014, which is an encouraging sign, showing businesses are investing in the future and are more proactive in driving growth," he adds.