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Bigger demands on invoice financing

We all know that banks are refusing to lend, but it seems at this very moment in time, there is a huge demand for alternative funding from small businesses, due to the fastest fall in lending since records began. Now that its quite something.

Here at Select Factoring, we like to think we keep abreast of all news factoring, invoice financing or asset based lending, and we have on numerous accounts reported that this trend is increasing, but this week it has really hit the heights.

Simply Business have made these findings, and discovered that lending has dropped £4 million between March and May of this year.

SMEs have been incredibly affected by the reduced lending which is down by 4.2% according to a recent report for the Economic and Business Research (CEBR).

47% of small business owners are relying on alternative funding such as  personal loans, credits cards and savingsto keep their firms afloat. Obviously this is a dangerous game to play when you’re using your own funding to keep business afloat. This way of funding allows companies to use the cash tied up in invoices rather than taking out loans and paying interest on loans and so on.

Jason Stockwood, CEO of Simply Business said:

“For many small business owners invoice finance has been a great option in
terms of easing cash flow problems, however it’s clear that UK business owners
are in need of more credit options — particularly with a view to growth. Being
forced to rely on personal finance is clearly unacceptable and could certainly
impact the economic recovery.”

This demand for invoice financing is bound to rise and rise, its an incredibly efficient way of raising funds, and at the end of the day, its a tiny cost compared to the interest that can be accrued over the term of a loan.

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  • Posted by Anonymous on October 7th, 2011

    This is incredible!~Very insightful and straightforward.

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