In such a fragile economic climate there are many reasons why a business could fail. However, according to a new survey conducted by Bloomsbury Professional, a leading tax and accounting information business, a lack of start-up finance is the most common reason for business failure. With bank funding hard to access and many businesses unaware of the government initiatives and alternative finance options available to them, it’s no wonder that so many start-ups are struggling to stay afloat.
71% of accountants interviewed, who often see first-hand why a business is struggling, said that insufficient finances to cover start up costs was one of the main reasons why they saw a range of businesses fail. Even though the government has sought to address this problem through initiatives such as the Enterprise Finance Guarantee Scheme and StartUp Loans, many new businesses are finding it impossible to access the finance options they so badly need.
Getting start up funds has always been a challenge for small businesses, but that’s now more true that ever in the face of ongoing fragile growth and with the double dip recession still a recent memory. The inability of new businesses to get the ball rolling with available start up funds is even more serious as it’s a huge obstacle to growth in the larger UK economy. The small businesses which could be providing the economy with grass-roots growth and employment opportunities are failing to perform, but often that can be traced back to inadequate financing.
If your start-up is looking for new ways to unlock cash flow to enable growth, then invoice finance is a key option to consider. A long sales track record isn’t necessary, so long as you’ve got orders on your books you might be eligible. This could give you access to funds immediately and could help you to cover those costly overheads. If your business needs extra funds, don’t just rely on the banks – be proactive and explore all your alternative options.