Despite the ‘credit crunch’, a new survey suggests that small businesses are defiant in the face of less favourable economic conditions, with many determined to continue with their expansion plans in 2008. However, late payment remains an issue for many companies.
The survey, conducted by the Asset Based Finance Association (ABFA), found that 74% of companies are refusing to put growth ambitions on hold. In fact, around half expect to increase their borrowing in 2008 with 67% either confident or very confident they will secure the additional funding to support their plans.
The survey was conducted at an IoD conference, which was attended by 180 companies from across the UK, to investigate issues such as cash flow and credit management, raising capital, funding expansion and accelerating growth
When asked about current financial concerns, 37% stated their relationships with clients were at risk from having to chase payments. This sentiment echoes the findings of the Government’s Small Business Survey which has highlighted the growing problem of late payments in this country.
Invoice Finance and Factoring options
Maurice Craft, chair of the Invoice Finance Group said: The majority of the results from the survey are very encouraging and I’m pleased that SMEs are planning to go ahead with expansion this year. It was also interesting to note that a significant proportion believes that media reports about a recession are over-hyped.
“However, there are still barriers to expansion which need to be addressed if UK SMEs are going to fulfil their potential. Of particular interest are the companies that cite managing late payers and their cash flow function as a hindrance to growth. There are options available to companies such as factoring and invoice financing which takes the burden away from chasing late payers and gives the guarantee of invoices being paid quickly, allowing the company directors to concentrate of growing the business.”