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Economy bullish but UK needs invoice finance boost

It is hard not to have noticed the big news – the UK economy grew markedly in the second quarter of the year. Another shot of confidence for the country’s SMEs? Definitely, but as a recent start-up survey suggests, invoice finance has a key role to play in maintaining momentum.

According to the Office for National Statistics, the UK economy grew by 0.4% in Q2 – the quarter-on-quarter growth rate has doubled, driven by the service and manufacturing sectors. The growth is undoubtedly good news for the country’s small businesses and is likely to further nurture the optimism that has been swelling in the sector this year.

However, caution still prevails, with many commentators predicting that there will not be a repeat performance in the quarters ahead. The results of a recent global start-up survey illustrate why SMEs continue to sit on their hats. According to the accountancy firm RSM, the UK is falling behind its continental neighbours in the numbers of start-ups.

Why is the UK falling down the European start-up league table? The cost of SME lending remains too high – start-up funding is too difficult to generate and maintaining cashflow remains a major challenge. For all the government’s efforts, for example with the Funding for Lending and Start-Up Loans schemes, the cost of business borrowing remains prohibitive.

This is where invoice finance and other alternative finance products come in. It’s no coincidence that invoice finance and the rest of the alternative finance sector have expanded significantly in recent years and it’s no surprise that the likes of invoice finance and peer-to-peer lending are increasingly entering the mainstream.

SME sector optimism is building and, as the small business finance landscape continues to change, it is clear that invoice finance and other alternative finance products have a key role to play in turning business confidence into business growth.

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

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