Invoice Factoring Could Stop Your Enterprise From Becoming Another Insolvency Statistic
With lack of working capital as a key factor in the majority of business failures, leading independent invoice finance broker Enable Finance Ltd is urging small businesses to address their finances now to avoid becoming another statistic.
Despite insolvency experts predicting a wave of business failures next year as evidence mounts [that the] UK is at the midpoint of a W shaped recession in which insolvencies peak once GDP stops shrinking, Enable Business Finance believes there are many choices out there to corporations that might forestall them getting into a Company Voluntary Arrangement (CVA) or going into liquidation.
Although the UK Governments intentions to increase the funding on the market to small and medium sized businesses including prop up measures such as tax deferments in their Time To Pay initiative. The fact of the matter is that while they may provide a temporary buffer against the storm, they are unlikely to be the lifeline that many need in order to survive. As such tax deferments are merely just postponing a cash flow problem today for tomorrow.
Small businesses need to take a closer look at their cash flow and review the funding options available rather than go down the road of no return. Debt factoring and other commercial finance facilities like invoice discounting and invoice finance can often support a long term funding solution for companies to improve their working capital and therefore vastly improve chances of survival in the recession.
Debt Factoring works by funding the outstanding invoice due within your sales ledger.g. your unpaid invoices) enabling businesses to meet those vital creditor payments such as PAYE and taxes, not to mention the more obvious supplier payments and of course, sufficient funds to meet salary and wage roll.
The Finance & Leasing Association (FLA) has recently announced that access to credit is still tight for most borrowers, and it’s clear that businesses need access to fast, flexible and effective cash flow solutions that positively impact upon the firm’s liquidity. Thus ensuring they are still trading and able to take advantage of the economic upturn when it comes.
Small to Medium sized business owners will find [that the] Asset Based Factoring trade has an open minded approach to financing their business with solutions such as invoice finance.In contrast to traditional banks, that can be inflexible and typically take a one size fits all approach, various funding suppliers sometimes take a much a lot of in-depth view of a business and take under consideration the entire money image when creating a funding decision.
Business owners should take a stark warning from the Governor of the Bank of England in his comment; "The UK economy has only just started along its road to economic recovery" and properly examine if their company is adequately funded. The Bank of England in its last Consumer Prices Index report stated that the UK will have slow recovery and not be in a state of prosperity until late 2011. This again further highlights the time scales involved.
Enable Finance Ltd are eager to speak with business owners and Directors about that various sources of funding are accessible to them and their specific business. Even if a organisation is looking at a corporate bankruptcy petition or has been threaten by Revenue & Customs with a Winding Up Order. The specialist business finance advisors may still have a solution and indeed help clear up the impending creditor pressure.
Tags: asset based factoring, business finance, business loans, invoice discounting, invoice factoring, invoice finance