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Four-in-ten ( 38 %) small and medium-sized businesses ( SMEs ) have suffered cashflow problems over the past two years , according to new research 1 by Amicus Commercial Finance , the specialist lender of flexible working capital to SMEs . The figure rises to two-thirds ( 65 %) among medium-sized firms with between 50 and 250 staff .
According to the study conducted among 500 small businesses owners , over the past two years one-in-seven ( 15 %) are still suffering liquidity problems and 12 % either came close to or became insolvent . Small businesses recognise the threat cashflow problems can
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pose ; nearly three-quarters ( 71 %) say it is the biggest risk they face .
On a sector basis , 35 % of finance and accounting firms report that are affected by cashflow problems . Regionally , companies in the north east have been the worst hit by cashflow shortages .
The biggest challenge caused by cashflow shortages is paying suppliers , cited by 41 % of business owners . This is followed by meeting debt repayments ( 30 %), buying inventory ( 29 %) and paying staff ( 24 %). One-infive ( 18 %) said they had lost contracts due to cashflow problems .
Amicus Commercial Finance provides a revolving
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working capital facility based on a proprietary invoice discounting platform which utilises the latest available technology and data extraction methodology . The firm ’ s proposition has proved to be very attractive to a broad range of businesses with a turnover between £ 1m and £ 20m .
Its ‘ Intelligent Cashflow ’ solution is user friendly , making it straightforward for firms to access working capital . It integrates seamlessly with a business ’ s accounting system , reconciling sales in real time . The company can quickly update each customer ’ s availability of funds and provide quick and easy access to additional cashflow .
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What challenges did your business experience as a result of cashflow problems over the last two years ?
Paying suppliers 41 %
Meeting debt repayments 30 %
Buying inventory 29 %
Paying staff 24 %
Accessing new finance 21 %
Loss of contracts 18 %
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Research conducted by Opinium online with 504 UK SME decision makers between 24th – 31st October 2016 .
John Wilde , managing director of Amicus Commercial Finance , commented : “ Our research shows that most small firms recognise the damage caused by cashflow problems but that doesn ’ t guarantee their immunity . The worst case
scenario is insolvency but in our experience , slow paying invoices are often to blame . As working capital and cashflow are by their very nature dynamic , most traditional systems have failed to keep pace over the last few years .
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‘ a tech-driven approach’ “ We have taken a fresh , tech-driven approach that builds on some of the lessons learned in the fast growing alternative finance sector . Here at Amicus Commercial Finance , we combine deep sector experience with a high-touch personal service and cutting edge technology to make the process as straightforward and efficient as possible .”
Source : Amicus Commercial Finance ( October 2016 )
amicuscommercialfinance . co . uk /
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