In the light of the double dip recession, it’s not surprising that the lending situation for SMEs is failing to improve. New figures from the Bank of England have confirmed this, leaving many small and medium businesses without funding. This means that looking to alternative funding measures, such as invoice finance, is becoming increasingly important in order for SMEs to help the UK economy recover.
Miserable Lending Figures
Data has shown that the lending to SMEs in the three months up to February 2012, lending to SMEs fell. In the document Lending Trends April 2012, the Bank of England showed that while in the longer term, wholesale funding markets had shown some improvement in 2012′s first quarter, the stock of SME lending continued to contract.
Lending to small and medium businesses by banks and building societies decreased by around $9bn in the three months leading up to February 2012. This is a significant decrease in an already harsh environment for funding. This means that the net monthly flow of lending in February was at its lowest ebb in nearly two years.
The is an ongoing trend, as lending growth for SMEs has been negative since late 2009. With such ongoing problems in finding funding, it’s all the more important for businesses to look into non-bank funding options.
For any business looking to release cash tied up in unpaid invoices, factoring and invoice discounting can help with cash flow and boost growth potential. These means of financing can be used by any business which sells products or services on an invoicing basis, and is not only for those companies who are struggling. A company with a healthy order book can make the most of it and take advantage of funding within 24hours.
Select Factoring specialises in invoice finance solutions which a whole range of small businesses can take advantage of.