Blog: Winter Cashflow Woes

The unexpected freezing conditions this week reminds us that we are still in the midst of the Winter period and even though we can see the days are getting longer and Spring is around the corner, there can still be a few cold snaps ahead.

The New Year, with all its promise of better times, doesn't always sweep in glad tidings initially, particularly if your business has its annual tax bill to pay, quarterly rent to find and will have probably gone through its quietest period of trading during late December and into January.

Add to this the annual shutdown over the recent festive holidays, wages still to pay and a current VAT quarter... it’s easy to see why many businesses have entered the New Year coughing and sneezing!

With only five or six weeks sales in the two months either side of the Christmas period, many businesses ended up suffering a hangover after the New Year as bills have started to stack up.

With many banks having rigid credit policies demanding action if a business makes two or three months of consecutive losses, going back to the bank cap-in-hand may not be the treatment, or give the diagnosis a struggling business wants to hear.

There are options!

Why not consider a shot in the arm by looking for an alternative form of funding. Invoice Finance, such as Invoice Factoring and Invoice Discounting, can offer just the tonic an ailing or hungover business needs.

It generally provides up to twice the amount of cash as a conventional overdraft without the need to provide your home as security. As it is based on the sales you create, it grows with your business giving greater flexibility and you don’t have to keep going back to the bank with cap-in-hand.

Unlike a bank, an Invoice Finance company is less interested in historic trading performance and balance sheet strength and happy to consider companies in turnaround or highly geared.

Having access to working capital based on the sales you have already made means that you no longer have to wait 30, 60 or even 90 days until your customer pays your invoice. In many cases the extra cash generated allows you to pay your suppliers early and obtain lucrative discounts which can cover the cost of the facility. All this and the fact you can have access to cash as soon as you have completed your sale and raised your invoice gives you time to get on nursing your business back to health.

Why not contact Skipton Business Finance today for a free and confidential health check for your business.

Find out more

At Skipton Business Finance, we offer the following types of Invoice Finance: