Thousands of UK SMEs seeking finance to improve cash flow
A new report from Purbeck Insurance Services has found that thousands of UK companies plan to use finance to improve their cash flow in the future, with 28% of the SME executives interviewed turning to external funders, including to cope with late payments. Other reasons for sourcing finance included acquiring equipment (27% of respondents), supporting a business acquisition (10%), R&D (9%) or recruitment (7%). Todd Davison, director at Purbeck Insurance Services, said that if business owners are providing personal guarantees to secure loans, it is important to consider insurance to protect their personal assets should they encounter repayment problems.
Strategies could include restructuring current finance arrangements, reviewing credit terms to suppliers, outsourcing the late payment debt, improvement stock control or looking at alternative sources of income such as renting office or warehouse space.