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How invoice finance is solving SME’s biggest problem

Maintaining cashflow has long been a major issue for small businesses and new research from Santander has confirmed that, despite the growing optimism among SMEs, it remains a key concern. The results underline that there is still plenty of room for invoice finance growth.

According to the high street lender, almost half of UK businesses are very or quite concerned about managing cashflow over the next year. Nearly one in six businesses are very concerned, with almost 50% hit recently by a cashflow setback. The top three reasons for these setbacks were late or failed payments, weak sales and unexpected costs and charges.

Tellingly, it is smaller companies that are feeling the most pressure, while larger businesses are less concerned. These findings highlight just how critical managing cashflow is to small businesses – it is easy to see how late payment, which continues to be a key problem despite efforts to introduce better payment terms, can prove destabilising.

So, where does alternative finance, the expansion of which has been driven by invoice finance, come in? With traditional lenders still cautious over SME lending, alternative finance is helping small businesses bridge the gaps caused by setbacks and enabling these companies to maintain forward momentum.

However, the recent figures from Santander suggest that there is still plenty of room for invoice finance sector growth. Invoice finance has growth sharply in popularity in recent years, not least due to its transparency, flexibility and affordability, but with almost 50% of businesses still concerned over cashflow, it’s clear that more SMEs would benefit from integrating it into their business plan.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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