Cash for Invoices Limited can keep small businesses away from financial distress by buying one or more of their trade invoices for cash.
New research from Begbies Traynor, the UK’s leading independent business recovery practice, shows that more than 275,000 companies were showing signs of “significant” financial distress at the close of 2016, representing the thirteenth consecutive quarter that corporate stress has risen on a year on year basis.
According to Begbies Traynor’s research for the last quarter of 2016, more than 275,000 UK businesses were experiencing ‘Significant’ financial distress at the end of 2016; an increase of 3% compared to the same period last year.
Of the companies experiencing financial distress during the last quarter of 2016, 91% were SMEs, indicating the scale of the problems faced by the UK’s smallest businesses.
Meanwhile, nearly a quarter (23%) of the country’s struggling businesses were in London, where almost 65,000 companies finished the year in a state of ‘Significant’ financial distress; an increase of 5% on the same period in 2015.
This rising distress comes at a time when the number of UK company incorporations is growing substantially, with more than 685,000 start-ups joining the economy during 2016 alone – the highest level since the start of the financial crisis in 2007. However, Begbies Traynor highlights that many of these start-ups are short lived ‘lifestyle’ businesses often forced upon people by changing circumstances, such as the loss of paid employment. For example, of the approximately.470,000 companies incorporated during 2011, almost 57% have since been dissolved, struck off or have entered formal insolvency procedures, and another 7.5% are not even trading.
Julie Palmer, Partner at Begbies Traynor, says:
“With the World Bank revising down its growth forecasts for the UK, alongside reports that the UK’s trade deficit widened to a worse-than-expected £12.2 billion in November , our data shows that levels of financial distress continue to rise across the country, most of all within the UK’s important SME community, which is widely regarded as the lifeblood of the economy.
“The scale of SME distress at the end of 2016 just goes to highlight the fragility of UK micro businesses, many of which are underfunded, lack management experience or are flawed in concept. Although record numbers of new start-ups continue to join the economy each year, a large proportion don’t stay in business for long, with growing numbers of aspiring entrepreneurs returning to more established businesses as soon as the opportunity arises.”
Ric Traynor, Executive Chairman of Begbies Traynor, added:
“Despite finishing the year in a state of heightened financial stress, it is too early to say that this is reflective of an underlying problem that is likely to continue or negatively impact 2017, as numerous macro indicators suggest that the New Year has got off to a reasonable start.
“EU exit negotiations and US trade policy could be major factors affecting business this year either for better or worse whilst rising inflation and fluctuating exchange rates are likely to have a negative impact. Either way 2017 could well be a defining year for UK business.”
Single invoice finance from Cash for Invoices Limited can provide an excellent solution to filling temporary cash crises. No security is needed, there is no on-going commitment to selling further invoices and no ongoing fees are charged. As long as the credit status of the debtor is acceptable, the company selling the invoice can collect up to 95% of the value of the invoice within a few days of contact with Cash for Invoices Limited. Find out for free and without obligation how you can get cash quick and easily. Click here.
Businesses that use invoice finance to manage their cashflow share their experiences in quotes below. They use a facility so have an obligation to regularly sell their invoices and they pay fees for the facility.
Find out for free and without obligation how you can get cash quick and easily using selective invoice finance from Cash for Invoices Limited. Click here.
“For a business which does have to deal with slow payments this [invoice discounting] is the only way to have a finance line which is flexible enough.” Evolution Foods
“We deal with supermarkets on a day-to-day basis and they often have payment terms of 60 days...Using invoice finance has been the only way for us to have a flexible enough credit line to deal with payment terms which are dictated to us.” Evolution Foods
“Whereas a loan is a fixed amount which I might not even use all of, using our invoices is great to fund small investments in things like people and technology. It may cost a bit more but the flexibility makes it worth it.” Data Duplication
“Invoice finance gives me flexibility but if we were to do something big like buy our own premises then it would probably make sense to do that through a big loan.” Data Duplication
“We wouldn’t be sitting where we are right now without the invoice finance line”Dawn Prints
Quotes from Growthbusiness.co.uk Nov 2013 (link)
Single invoice finance from Cash for Invoices Limited can provide an excellent solution to filling temporary cash crises. It is superior to conventional invoice discounting facilities offered by banks, because there no security is needed, there is no on-going commitment to selling further invoices and no fees are charged. As long as the credit status of the debtor is acceptable, the company selling the invoice can collect up to 95% of the value of the invoice within a few days of contact with ACF.
Find out for free and without obligation how single invoice finance from Cash for Invoices Limited can provide an excellent solution to filling temporary cash needs. Click here.
The Federation of Small Businesses (FSB) has published a comprehensive report looking at the way small firms and the wider economy are affected by poor payment practice. The report has found that existing policy interventions have had no discernible effect on tackling problems around the UK’s poor payment culture in the last five years. Small businesses report that, on average, 30 per cent of payments are typically late compared with 28 per cent in 2011.
The impact on small businesses can be devastating. The report shows that 37 percent of small firms have run into cash flow difficulties, 30 per cent have been forced to use an overdraft and 20 per cent say late payment has hit profits. At the extreme end, late payments and resulting cash flow difficulties have caused businesses to fail. In 2014, if payments had been made on time and as promised, 50,000 business deaths could have been avoided, growing the UK economy by £2.5 billion - a vital uplift to UK GDP just as business confidence dips amid fears of a weakening domestic economy.
Mike Cherry, National Chairman at the Federation of Small Businesses, said:
“Uniquely, the UK now risks having a business culture where it is acceptable not to pay SMEs on time. Based on an imbalance of power between large companies and their small suppliers, this now has a chilling effect right across the economy. It’s distressing to hear from our members that in 2016 the average value of each late payment now stands at £6,142.
“Small businesses have to run a tight ship with their cash flow, and as they struggle with increasing business costs on one hand and an uncertain domestic economy on the other. They should not also have to struggle with the stress, time and money required to chase overdue payments from corporate giants.”
Single invoice finance from Cash for Invoices Limited can provide an excellent solution to filling temporary cash crises. NO security is needed other than a refundable retention (subject to satisfactory debtor performance), there is NO on-going commitment to sell any invoices and NO ongoing fees are charged. As long as the credit status of the debtor is acceptable, the company selling the invoice can collect up to 95% of the value of the invoice quickly from Cash for Invoices Limited. Find out single invoice finance from Cash for Invoices Limited can provide an excellent solution to filling temporary cash needs. Click here.