Many small UK firms are continuing to be refused bank credit, the Federation of Small Businesses (FSB) has indicated in its latest report.
A survey of 3,000 business leaders for the second quarter of the year has showed that small firms are feeling the pressure from rising overhead costs, whilst the amount of companies with intentions to grow their business has fallen.
One in five claimed that access to finance was a major problem impinging the ability to grow and two in five said they had been refused credit from the banks.
Chairman of the FSB, John Walker, said of the small business organisation’s latest survey results: “If small firms cannot access credit it constrains their investment plans. We know from past research that many small businesses missed growth opportunities because they couldn’t access money they needed.”
“There also needs to be more alternative sources of finance that small firms can tap into.”
Alternative financing for small firms
One such alternative is invoice finance, a solution which allows small firms to unlock their cashflow.
As many businesses will attest to, it can take up to 90 days for invoices to be paid, something which can severely inhibit working capital levels. Invoice finance solutions such as invoice factoring and invoice discounting work to release the majority of money tied up in unpaid invoices.
Amazingly, invoice factoring as a fact of business life has origins in England prior to 1400. That's over 600 years ago!