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How invoice finance can combat rising business costs

SME cashflow is coming under increasing pressure as a result of rising business costs. Invoice finance can help combat this problem.

According to a new survey by the Forum of Private Business, small businesses are struggling with cashflow thanks to rising energy, marketing, transport and staff costs. Over 80% of the SMEs questioned claimed that rising costs were adversely affecting their performance.

The findings call into question the ability of the SME sector to make the most of the upturn in economic conditions and play a key role in driving wider industry growth. Much has been made of record levels of SME optimism, but turning this into real growth will clearly not be straightforward.

By improving access to capital, invoice finance and other alternative finance services, such as peer-to-peer lending and crowdfunding, are easing the pressure on cashflow for SMEs. Better cashflow puts businesses on a more sound financial footing and this security can help them deal with increases in costs.

Tellingly, new figures from LDF show that accessing finance is still a major issue for SMEs, despite the upturn in economic conditions and the various initiatives to improve small business funding that the government has launched. According to LDF, the number of complaints received by the Financial Ombudsman Service from SMEs regarding loan and overdraft applications being turned down by banks rose by a third in 2013.

In the face of continued challenges involving funding and costs, non-bank finance is providing SMEs with a cashflow lifeline.

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

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