Asset Based Factoring Solutions Offers UK Business A Better Cash Flow

With lack of working capital as a key factor in the majority of business failures, leading independent invoice finance broker Enable Finance Ltd is urging small businesses to address their finances now to avoid becoming another statistic.

Despite insolvency experts predicting a wave of business failures next year as proof mounts [that the] UK is at the midpoint of a W shaped recession in which insolvencies peak when GDP stops shrinking, Enable Business Finance believes there are many options on the market to corporations that could stop them getting into a Company Voluntary Arrangement (CVA) or going into liquidation.

Despite well intentioned efforts by the Government to increase the funding available to small and medium sized businesses including prop up measures such as tax deferments in their Time To Pay initiative. The fact of the matter is that while they may provide a temporary buffer against the storm, they are unlikely to be the lifeline that many need in order to survive. As such tax deferments are merely just postponing a cash flow problem today for tomorrow.

Small businesses need to take a closer look at their cash flow and review the funding options available rather than go down the road of no return. Debt factoring and other commercial finance facilities like invoice discounting and invoice finance can often support a long term funding solution for companies to improve their capital adequecy and therefore vastly improve chances of survival in the recession.

Invoice Finance facilities work by releasing cash tied up in your debtor ledger (e.g. your unpaid invoices) enabling businesses to meet those vital creditor payments such as PAYE and taxes, not to mention the more obvious supplier payments and of course, sufficient funds to meet salary and wage roll.

The Finance & Leasing Association (FLA) has recently announced that access to credit is still tight for most borrowers, and it’s clear that businesses need access to fast, flexible and effective cash flow solutions that positively impact upon the firm’s liquidity. Thus ensuring they are still trading and able to take advantage of the economic upturn when it comes.

Small to Medium sized company owners will notice [that the] Asset Based Lending business has an open minded approach to financing their business with solutions like invoice finance.  Unlike traditional banks, which can be inflexible and often take a one size fits all approach, alternative funding providers typically take a much more in-depth view of a business and take into account the entire financial picture when making a funding decision.

The fact that the UK economy is not out of the woods yet; underlined by comments by the Governor of the Bank of England “The UK economy has “only just started” along its road to economic recovery” is further justification that business owners need to be adequately funded. Furthermore the Bank of England in its latest inflation report indicated it would be late 2011 before the UK economy recovered to the level it was at before the recession. This again further highlights the time scales involved.

Enable Finance Ltd are eager to talk with business owners and Directors about which various sources of funding are obtainable to them and their specific business. It should also be worth noting that even if a Company is facing insolvency proceedings or have been threatened with a winding up petition. The specialist business finance advisors may still have a solution and indeed help clear up the impending creditor pressure.