A new survey has indicated that directors are putting the long-term viability of their businesses at risk by using ‘quick-fix finance’ solutions.
If financial issues are only addressed using quick-fix business finance facilities in the short-term, problems may build up over a longer period of time as high interest rates kick in and payments get out of hand.
Over half of respondents to the survey were utilising business credit cards as a form of business financing, whilst 47% indicated they require an overdraft to keep them trading.
This is in contrast to 17% who use such long-term options as invoice finance, which is a funding option designed to release sustainable amounts of cash from the sales ledger and offers the business the chance to access more money as more invoices are issued.
The research also indicated that more invoice finance users reported a rise in turnover (57%) from their chosen facility, in comparison to those using overdrafts (36%) and credit cards (32%).