More and more businesses are maxing out their overdrafts, a sign of financial stress, according to a survey by insolvency trade body R3.
The figures reflected the third quarter of 2011 and showed 22% of respondents had made frequent use of their maximum overdraft facility, which was a 9% increase on quarter two.
The survey also revealed that there are more businesses experiencing decreased profits, using the body’s Business Distress Index. In fact, 43% of those surveyed saw lower profits, an increase of 8% on the previous quarter.
Using year-on-year data, more businesses were showing signs of distress than in September 2010, as the number of businesses experiencing difficulty paying invoices or taking on new borrowing to pay off existing debt both increased.
Alternative funding solutions
Are you currently nearing your overdraft limit, but in need of more cash in the future?
Invoice finance solutions can help to pay off your overdraft, before then unlocking cash you have tied up in unpaid invoices and therefore providing you with a more flexible funding solution that grows in line with your business.
Skipton Business Finance are specialists in providing UK SME's flexible invoice factoring and invoice discounting.