SMEs Struggle For Finance Risks Cash Flow

23rd February 2018.

Fifty-five percent of UK SMEs are unable to access all funding needed to grow, and without the right knowledge or education on how to obtain it.

Research from Liberis has found that over half of the SMEs in the UK are not aware of how to obtain funding, and many are risking stinted growth as a result. Since the Bank of England’s interest rates hike made borrowing more expensive, small businesses have been struggling to find an alternative. Many small firms lack the skills or confidence to embrace more digitally-reliant finance platforms, seeking a cash-injection that would suit their needs as well as their business. As the lifeblood of the economy, if they fail to achieve funding this could impact the country negatively.

Credit management products and debt recovery services are therefore a less invasive route that SMEs can take to gain funding. By recovering bad debt and chasing late payers we get our members back money that is owed, rather than creating a further obligation to other institutions.

With falling SME confidence in the economy and mounting concerns over costs given the relative weakness of the sterling, Liberis strongly urges the UK to better support its small business community.

It isn’t just funding that SMEs need, however, it’s education. SME business owners simply need to have a better awareness of what is on offer to them. Many business owners jump to lenders and exploitive interest rates due to an assumption that that is the only option available.

Liberis found that 62 percent of UK SMEs said they need funding to grow and expand, but 57 percent of SMEs were unsure which provider to obtain funding from. In a separate report from the British Business Bank, the UK government pledged its dedication to a more targeted educational campaign on the topic of SME finance.

Finding the right funding is essential for every small business owner. You need the financial freedom to expand while not sacrificing half of your business in return. Finance platforms such as crowdfunding are popular but require a slice of the business in return, while traditional lending simply requires more than most are able to give. SMEs need more than just the cash, but the knowledge on how to make the right decision for their growing business.

Here at the Credit Protection Association, we offer our members a chance to grow their business with the smallest amount of risk; limited risk to their independence and to their bank account. Our debt recovery services allow business owners to receive payment for overdue accounts and late payments that were long forgotten. We also provide our members with industry news and information, via fortnightly emails and newsletters. This keeps them informed and educates them on how to grow and improve their business. This is what sets credit management companies apart from lenders; we ensure our members have more once they leave our services, not less.