Increasing overdraft rates are pushing many small business to seek out more flexible cash flow products such as debtor finance, says Bibby Financial Services. As cash rate drop, business overdraft rates remain higher than ever. Business lending data from credit research service CANNEX shows the major banks increased rates on the most common secured overdrafts by approximately 0.51 percent, with typical commercial overdrafts now ranging from around 9.42 percent to 11.58 percent secured against residential property. According to Greg Charlwood, Asia Pacific chief executive of global debtor finance provider Bibby Financial Services, this is making alternative cash flow products such as debtor finance more attractive to small businesses looking to bolster cash flow and secure funding for their businesses in a tighter credit environment. "Businesses are more in need of cash flow funding in the current environment. We are receiving record levels of enquiries for debtor finance in 2009 and new client growth is running at 30 percent above 2008 levels for the first quarter. A significant amount of these enquiries are being driven by business owners and advisers looking to replace their overdraft rather than increasing limits." Charlwood believes there are many benefits of obtaining debtor finance for small business. "Because debtor finance facilities are linked to sales, unlike overdraft facilities the limits are flexible so funding is better matched to the needs of the business, particularly for growing businesses," said Charlwood. Charlwood predicts debtor finance will come into its own in the current environment and become a financial mainstay for small and medium-sized businesses in the near future. "We expect debtor finance will continue to grow strongly in 2009, fuelled by tighter credit conditions, slowing customer payments and tougher trading conditions. The need for strong, reliable cash flow is certainly underlined in the current environment."