More than half of Small Medium Enterprise (SME) owners say poor cashflow is causing them serious anxiety, leading to calls for greater awareness of broader finance options.
A recent survey of 1,000 UK small-to-medium-sized company owners, commissioned by The Prompt Payment Directory (PPD), revealed that the number of SME business owners struggling financially – and consequently suffering from mental health issues – has risen dramatically over the last year.
The study found that 50% of SME owners’ businesses – 23% more than last year – have been on the brink of bankruptcy or liquidation, or could be soon, due to late or outstanding invoice payments from customers. Some 52% of respondents – also nearly a quarter more than last year – blame poor cashflow for their anxiety.
63% of business owners said late payment issues had meant that they had not paid themselves for some time, while 42% had stopped or delayed bonuses and 20% had been forced to pay staff late.
Mark Kozo, Head of Marketing at Portman Asset Finance, says: “Late payments can cause significant problems for small-to-medium-sized companies. As well as having a detrimental impact on the owners themselves, both professionally and personally, it can also affect staff.
“Aside from adopting more robust collection and due diligence processes, company owners may find it helpful to be made fully aware of the range of financial options available to them when times are tough.
“The lending landscape is a lot wider than it used to be, and there are alternatives to applying for a traditional bank loan. When cashflow is running low, arranging a lease finance agreement can prove beneficial as it gives business owners quick access to the assets they need to invest in the growth of their company without tying up working capital. This injection of funds can help get a business out of a rut and kick it back into gear, boosting staff morale as well as the company’s bottom line.
“Alternatively, we provide commercial loans for any agreed purpose, such as paying staff salaries, which can tide companies over while they wait for late invoice payments to come in. With low rates available from 2.5% and a fast release of funds, this can prove an effective solution.
“Business owners can also consider the option of refinance, allowing them to release locked in equity from their current assets. The unlocked funds can then be used however they require.
“It’s important that owners of struggling businesses realise there is a wealth of financial options out there. By speaking to a trusted and long-standing finance broker that has access to a broad panel of lenders like Portman, they can be advised on what product best suits their individual requirements. They will then have all the information they need to make an informed decision.”
If you would like to discuss securing fast and affordable finance to boost your business, call our specialist Account Managers on 01604 321 995. More details about our finance products can be found here.