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SMEs Get Creative To Secure
Business Cash Flow
8th July 2009
30% prepared to take out personal loan to fund business;
100% increase in SME owners turning to family and friends for business funding.
Almost a third of SME owner managers, equivalent to 1.4 million businesses UK
wide, would take out a personal loan to fund their business according to Close
Invoice Finance, part of the FTSE 250 merchant banking group, Close Brothers
Group plc.
The latest Close Small Business Finance Barometer based on a survey of over
500 SME owner managers found that nearly one in ten (7%) of SME’s also admitted
in desperate times they would use a credit card to fund their business.
In the 2008 Close Small Business Finance Barometer, one in ten of those
surveyed said they would approach family and friends if bank funding dried up.
Latest statistics reveal this has doubled with now 20% of businesses nationwide
relying on those closest to them for financial support.
David Thomson, Chief Executive Officer of Close Invoice Finance said:
“SMEs continue to feel the effects of the lack of funding available
from traditional sources. This has forced more and more SME owner managers
to pursue risky short term strategies to secure cashflow and in the process,
put themselves and those closest to them, under intense pressure.”
David continued:
“SMEs need to consider every route available to free up
capital and, at the same time, be deadly serious about tackling late payment
to safeguard the long term health of their business. Cashflow management
tools can give companies complete peace of mind and provide protection
against the impact of issues such as late payment and even bad debt.”
Invoice finance is an alternative route to securing funding that allows
companies to raise cash quickly and easily against their sales ledger, affording
businesses a greater degree of flexibility and control over their cash flow. As
more and more businesses are impacted by late payment and bad debt, Close
Invoice Finance recently upgraded its award-winning invoice discounting product,
IDeal™, to include bad debt protection cover. IDeal™ now offers clients all the
benefits of the real-time exchange of payment, plus the extra peace of mind of
that comes with knowing they are fully covered should any of their protected
customers fail to meet payment terms.
