APRIL 2010

The Lessons Of The GFC

Clive Isenberg, Octet Finance

So far as Australia is concerned, the worst of the Global Financial Crisis appears to be over. But we shouldn't let it pass without learning some of its valuable lessons, says Clive Isenberg of Octet Finance. He says it served to underline the old maxim that cashflow is king, as many businesses were caught in the squeeze between suppliers - especially in China - demanding cash on delivery and customers who were pushing out payment periods. Liquidity was also a problem, with banks tightening their scrutiny and becoming ultra-cautious about risk. That underlined the need to diversify funding sources, and to be present an impeccable case to potential lenders. It's also a timely reminder to consider alternative sources of funds, like supply-chain financiers, and more imaginative ways of managing your debtor list.