It stopped providing its services to companies that used them to push out bill payments beyond 30 days, which has forced construction group CIMIC to review its use of Greensill’s facilities, following criticism that the services could be abused.
But Greensill argues there is still “value” in supply chain finance, claiming that 20-80 per cent of suppliers will use it if it is offered.
“Even on 30-day terms for small business we would expect that there will still be demand for the service,” Greensill says in its submission to the senate education and employment committee, which will report at the end of July.
Greensill founder Lex Greensill told The Australian Financial Review in May that demand for supply chain finance was up 73 per cent in the first quarter compared with the same period a year earlier, and up more than 120 per cent in April.
US financial technology group Taulia, which partners with Greensill, said in April that volumes of early payments on its platforms had risen by 208 per cent in March compared with the previous month.
The Australian Fresh Produce Alliance, which represents fruit and vegetable suppliers like the Costa Group and Driscoll’s, said a mandated 30-day payment period would become a default payment period, and potentially delay payments to farmers who are getting paid earlier within 7 to 21 days.
Telstra, which now pays invoices of up to $2 million in 20 days, has asked for more clarity on payment periods – which it says should start when invoices are received rather then when they are issued (as has been proposed in the bill.)
The legislation has suggested giving companies 18 months to transition to the new disclosure system, but the ombudsman says they should only be given 12 months.
Ms Carnell said in her submission that 2020 had been the hardest year many small businesses had ever experienced due to COVID-19, and that paying small businesses within 30 days would boost the economy by $313 million annually.
