According to Santander Corporate & Commercial, 13% of decision makers in the UK are using personal credit facilities such as; credit cards and personal loans to finance some of their struggles in their company.
The SME Access to Finance study, has also shown that out of 683 senior decision makers 25% of them relied on an overdraft product over the past year. The figures have shown that it is mostly common in the North East Region, as you can see below 26% of decision makers have or are considering using a personal finance facility – this is 2 times more than the nation’s average.
The study carried out has also gathered information to show that 8% of the firms have never revised their finance conditions with a sight to any financial steadiness or to access the value of money that is needed to develop new ventures. As the New Year approaches 43% of businesses have claimed that they are very worried about how they are going to manage with their current and potential cash flow. In London, cash flow struggles are the most frequent and common as, 38% of the decision makers’ fear for their cash flow over the next 12 months.
The main issue for the struggles within the businesses is the late or unsuccessful payments from their customers, 25% have struggled because of this, however only 5% admitted that they have used an invoice finance service in the past year.
The joint managing director of SME banking at Santander, Mike Reeves has said “It’s worrying to see that many of Britain’s small firms are relying on personal credit facilities to finance their business, and are concerned over effectively managing cash flow.
If businesses are experiencing problems with late or failed payments, then the simple answer is invoice finance. It’s a tried-and-tested method of unlocking the value of unpaid invoices, providing companies with immediate access to their money.”
Businesscomparison.com is here to help with invoice difficulties, by comparing the best deals in the market.
He went on to say “SMEs are the lifeblood of the UK economy, helping to create jobs and drive local economic growth. Santander Corporate & Commercial knows that and, as a scale challenger, we bring a unique approach to help all UK businesses achieve their growth ambitions.”
Here are our 5 tips on how to manage cash flow:
- Set a cash flow target
Set budgets, prepare and maintain what you are spending and what you are getting back from it.
- Invoice promptly
It is important to sort and receive all your invoices within a certain time, most people will fire out their emails on the last working day of the month in hope that they will receive confirmation by the 2nd
- Customers should be able to pay easily
No one likes hassle, especially when it comes to payments. Make sure they can pay you in the most simple and consistent way. We recommend using online banking.
- Use technology
Technology is today, it is yesterday and it is tomorrow, use the right technology to look after your cash flow and keep you updated.
- Finally don’t just focus on profit
Of course, profit is important but, so is cash flow. Cash flow is needed to sustain a business. Without cash flow there won’t be a business.