Bank of England figures that have shown a fall in lending at the start of 2012 have raised concerns amongst experts over the state of the small business funding market. Lending fell by £1.7bn in March, following a record fall in February. This shows the necessity of new means of SME financing – such as invoice finance solutions.
Dr Stephen Bence, director of BusinessFunding.co.uk is amongst those who believe that the economic outlook will remain weak unless there is better access to funding. Without cash to allow for flexible day to day running and funding innovation plans, it’s unlikely that the UK economy will start to recover well in the near future.
Mr Bence commented, “Businesses, particularly small businesses, continue to suffer from reduced bank lending. Particularly problematic is the lack of unsecured lending, meaning that small business owners have to put their house or other assets on the line. This will continue to depress the economy if the situation does not ease.”
Despite the lending figures for March showing an improvement on the previous month’s figures, it’s still part of a trend that shows a downward spiral of lending availability. The ongoing reluctance of banks to lend more to small businesses has prompted many to call for wider awareness of the alternative finance methods that are available.
Mr Bence continues, “Given the difficulties then in my view businesses ought to try and look outside traditional forms of lending and there are a large number of those sorts of forms lending emerging and gaining in popularity.” These include invoice finance and asset based finance.
Invoice finance can offer flexible funding that lets businesses release funding tied up in unpaid invoices. This lets companies pay bills and suppliers, fund growth and generally run smoother, especially with the prevailing late paymnet problems that blight the small business sector.
From factoring to invoice discounting, Select Factoring has a range of solutions that can help a whole range of UK small businesses.