Business Shows Signs Of Growth From Invoice Finance Indusry

Beneficial news from two finance industry studies as over fifty percent of Uk SMEs strategy to enhance headcount more than  the subsequent twelve calendar months and encouraging lending statistics from the Asset Based Lending industry.

An encouraging 54% of SMEs in the United kingdom plan to recruit far more employees within the subsequent twelve months, and a further 44% expect their small business to expand this particular calendar year.

The actual figures are drawn in the quarterly Little Enterprise Finance Barometer, a survey form of 2000 small companies throughout the Uk which aims to measure Small medium enterprise sentiment on numerous important small business finance issues.

The most recent quarterly figures released by the Asset Based Finance Association (ABFA) show total product sales from businesses financed by asset-based finance have improved, with customer sales at £49,371m, a rise of 8% from March 2009.

Whilst there may be an 8% improve in turnover compared for the Q1 2009 figures (March 2009), there may be a 6% drop in advancements, which might indicate that members’ customers are being conservative with regards to drawing on funds available to them.

The newest figures are interesting. ABFA members’ customers are representative of companies of all sizes but particularly of the Sme community. This development in turnover is usually a optimistic indication that increased demand is filtering by means of to all levels of British market.  However, whilst customer revenue are encouraging it seems that companies are treading carefully when it comes to borrowing suggesting an underlying degree of skepticism surrounding the UK’s economy.”

Though overall advancements were down, advancements against plant and machinery witnessed a optimistic growth of 9%, indicating that with the resurgence of British manufacturing, much more production firms are turning to asset-based finance to fund their small business requirements.

The ABFA stats also suggest that Uk firms are expanding their horizons outside in the United kingdom to locate new business chances, with export invoice discounting showing a good rise of 15%.

It’s not all good news that 33% of participants said that cashflow continues to be their greatest enterprise problem for the 12 months ahead, which is up on last quarter’s figure of 20%.

Whilst companies clearly feel that their prospects for company expansion are seeking up, a weak cashflow could prevent them from taking benefit of possibilities.

Banks remain tough on lending and late payments continue to make a large dent on what could possibly otherwise be a good flow of cash. We comprehend the imperative for a wholesome flow of funds and the challenges facing our clients as they walk the road to economic recovery.

Enable Invoice Finance arrange factoring and invoice discounting up to 95% on the company’s unpaid invoices, allowing them to get on with running and expanding their business without having the added stress of inadequate cash flow.  re:E-abl296x

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.