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Is there room for SME optimism?

The view from the top of the finance world is that things are gradually improving at the grass roots SME level in the UK – as believed by David Oldfield, the MD of Lloyds Commercial sector. After stepping down as the head of Asset Finance, he has got to know many of the 1.2 million SME customers of the bank, and he believes there’s reason to be cautiously optimistic about UK prospects.

He says; “There is a level of emerging confidence among small businesses, however skills and recruitment investment are rather on hold and this is a problem for competitiveness. I have spent a lot of time meeting customers and what is encouraging is the way that [the great majority] of small businesses, against a backdrop of very tough conditions, facing some huge business challenges, have been very resilient and most have actually been very successful.”

This is all in the light of shifting expectations about available funding and a change in lending criteria from the banks. The recession has driven banks to become more rigid in their requirements, and as such SMEs have been driven to investigate less traditional means of funding, such as invoice finance. Whereas debt finance such as overdrafts, were once the first port of call for business finance, now we see a greater range of solutions being employed by businesses.

Invoice finance is an accessible, flexible and growth friendly way to resolve funding and cash flow issues for your business. Whereas banks might require years of financial history, factoring can be used even by start up businesses looking to grow who will not have a long track record. Invoice discounting can be used by bigger, more established companies, and it gives businesses complete control over their credit collection duties.

So, do small businesses have reason to be optimistic in the current financial climate? There are more funding options out there than you might think.

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