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Slow But Positive Growth

There is new, and rather unexpected, optimism in the construction sector SMEs. However, growth in general remains sluggish, and there’s a need for more businesses to think outside the box when looking for funding for growth. Asset based finance and invoice discounting are two options that can allow your business to continue to grow.

March saw new orders for construction activities rise to a 21 month high, and rose at their fastest rate for four and a half years. With many companies needing to boost cash flow to allow recovery and growth, this sounds like welcome news to be hearing at the start of 2012.

There was also a pick up in the purchasing managers index (PMI), which suggests that recovery is now happening within the manufacturing sector. The index increased from 54.3 to 56.7, which is again good news.

The influence of these two sectors is significant, and the slump within manufacturing and construction were seen as big factors in the economy shrinking in the end of 2011. Though improvements are now happening, the rate is still slow and needs to be boosted to stop growth from stuttering to a halt.

The British Chambers of Commerce stated in its quarterly economic assessment that although the UK will avoid falling back into recession this year, it is due to only grow 0.6% – which needs to be higher. Growth in the services sector, which makes up 75% of the economy, has been particularly slow.

Cash flow is still one of the prevailing problems, and is something that is strangling any potential for growth amongst a lot of small and medium businesses. Rising oil and food prices could continue to buoy up inflation, and the euro debt crisis continues to impact on confidence.

Alongside increased government measures for small businesses, such as scrapping the rise in business tax and credit easing programs, many SMEs can help themselves on the road towards growth. There are many alternative finance options that can boost cash flow and allow small businesses the room to grow.

Invoice discounting and factoring are two ways of financing growth which can be deployed when your business needs to tackle late payment and cash flow problems. The businesses that will emerge out of the economic downturn most strongly will be the ones who are daring enough to innovate and continue towards growth. Asset based finance and invoice financing can release cash flow, letting your business stay ahead of the curve.


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