I saw an article recently that stated that nearly a third of SMEs wanted a new government to reverse the Brexit decision. As a limited straw poll (1,000 owners and directors out of a market of 5.5m companies) it was the perceived business impacts that were the most interesting to me. Of course, a lot depends on which sector your business is in and who are your clients and suppliers.
Recent commentary implies that we are likely to experience slower economic growth but much does depend on the actual nature of Brexit and this may well increase the trend that late payment of invoices remains a continuous problem for SMEs (published statistics indicate that about half of all UK invoices are currently overdue (estimated in 2015 at £55 billion) and it takes on average 72 days for invoices to be paid).
Historically, all business like to operate under the premise of being paid as quickly as possible and paying away as late as possible and post Brexit, the habitual approach of the largest firms to use delayed payments as part of their financial planning may very well increase to the detriment of their SME suppliers.
For many businesses facing a cash flow issue, it is important that you act in a sensible manner rather than pressing the panic button. There’s a myriad of ways of obtaining “credit” with some being more sensible than others. Despite the financial crisis, many firms still start with their bank, even though many aren’t lending to growing businesses like they used to and that is why you should look at the alternative finance space.
Whilst most attention in this area has been on peer-to-peer retail lenders and equity crowd funders, but there’s another, much older, area of non-bank small business finance that has also grown in importance in recent years, being the invoice finance and asset based lending industry. Statistics show that Invoice Financing is used by 44k of 5.5m UK SME businesses, which indicates that there is potential for the right product that meets the needs of simplicity, cost and return for all parties.
FloFunder is aimed at the vast Small Business market, with smaller investment and invoice requirements and offers a paperless, fully integrated workflow between funders and companies and works by automatically matching an invoice to a wide group of funders.