According to the latest Close Brothers Business Barometer research, half of businesses in the UK and Ireland say the coronavirus pandemic has negatively impacted how quickly their invoice payments are resolved.
Two fifths of SMEs say that they are experiencing more delays to payments, while a further 9% are seeing an increase in bad debts. The issue is most acute for medium-sized businesses, with between 61 and 250 members of staff, where 67% have reported a rise.
Similarly, cash flow, finding extra working capital and late payments were named as the three main concerns SMEs have at present.
Accessing the right funding
The research, which surveyed 900 senior decision makers, also found that 65% of businesses think that accessing financial support is currently a major or moderate challenge.
However, many remain unaware of funding options outside of traditional banking. Fewer than half say that they are aware of invoice finance and just 38% say they have heard of asset based lending (“ABL”). Nearly a third admitted they were unaware of any alternatives at all, suggesting there could be a considerable knowledge gap.
Access to an appropriate finance solution is vital for SMEs, enabling them to achieve their goals. Using finance options such as invoice discounting, ABL and the Coronavirus Business Interruption Loan Scheme (“CBILS”), Close Brothers can provide working capital without businesses having to take out an unencumbered loan or overdraft. These types of funding models can be an effective way to improve cash flow and support ongoing work.
For many small and medium sized enterprises, these lesser-known solutions could provide a reliable source of working capital and support trading in today’s uncertain environment.
Helping businesses thrive again
In challenging times, we see many succeed by using these well-established funding methods, but we also know that many more are unaware of these options or perhaps have a limited understanding of them.
In fact, our solutions work simply. We pay you up to 90% of the value of your invoices as soon as they are raised, and then once they have been settled, you receive the balance less a pre-agreed fee. We can also release additional liquidity from other assets on your balance sheet, such as inventory or machinery, enabling you to improve cash flow without interrupting access to the tools you need.
If late payments are causing disruption for your company, decision makers can consider releasing cash from their unpaid customer invoices and other assets upfront. As we move towards more normality and economic recovery, the right funding solution could enable you to thrive again.
Find out more today.