’Subdued’ lending market a concern for SMEs

Invoice finance facilities are used by tens of thousands of businesses across the UK

Recently released Funding for Lending (FLS) figures have indicated that the credit market for small-to-medium-sized enterprises (SMEs) remains “subdued”.

Approximately half of all SMEs that have applied for loans over the last two years have either had their application denied or they are still waiting for feedback.

Despite the improving economic picture, many UK SMEs are still having cashflow crises, according to another survey.

Almost one in three said that a lack of cashflow was currently holding back their business and hindering growth. 23% said that cashflow had limited their marketing activities, whilst 28% were paying their suppliers later due to poor cashflow.

The research also showed that 18% of SMEs will suffer a cashflow shortage at least once a month, with late paying customers and seasonality variations the main reasons behind poor cashflow.

One in 10 businesses had required funds of between £10,000 and £30,000 to keep their business running smoothly, whilst sole traders were the most likely to run out of cash.

Invoice Finance for Business Growth

In today’s market, SMEs have a number of other alternatives to bank credit when it comes to business finance.

One such option is invoice finance, a flexible method of releasing cash from unpaid invoices. Invoice finance options, which include invoice factoring and invoice discounting, are highly accessible to many SMEs as it focuses on the future potential of a firm rather than its history of profit.

If you’d like to find out more about invoice finance, why not check out our list of invoice FAQs, or contact us today on 01756 694933.