Asset Based Factoring Solutions Offers UK Business A Better Working Capital

With lack of working capital as a key factor in the majority of business failures, leading independent invoice finance broker Enable Finance Ltd is urging small businesses to address their finances now to avoid becoming another statistic.

Despite insolvency experts predicting a wave of business failures next year as evidence mounts that the UK is at the midpoint of a W shaped recession in which insolvencies peak after GDP stops shrinking, Enable Business Finance believes there are many options available to firms that could prevent them entering a Company Voluntary Arrangement (CVA) or going into liquidation.

Although the UK Governments intentions to increase the funding on the market to small and medium sized businesses together with prop up measures like tax deferments in their Time To Pay initiative. The fact of the issue is that despite they may give a interim barrier against the storm, they are unlikely to be the lifeline that many need in order to continue to exist. As such tax deferments are merely just postponing a cash flow problem today for tomorrow.

Small and Medium sized business owners need to review their business financing options before they find their usual source of business finance have dried up. Debt factoring and other commercial finance facilities like invoice discounting and invoice finance can often support a long term funding solution for companies to improve their working capital and therefore vastly improve chances of survival in the recession.

Debt Factoring works by funding the outstanding invoice due within your sales ledger.g. your unpaid invoices) enabling businesses to meet those vital creditor payments such as PAYE and taxes, not to mention the more obvious supplier payments and of course, sufficient funds to meet salary and wage roll.

The Finance & Leasing Association (FLA) has recently announced that access to credit is still tight for most borrowers, and it’s clear that businesses need access to fast, flexible and effective cash flow solutions that positively impact upon the firm’s liquidity. Thus making certain they're still trading and in a position to take advantage of the economic recovery when it comes.

Small to Medium sized company owners can find [that the] Asset Based Factoring industry has an open minded approach to financing their business with solutions such as invoice finance.Unlike ancient banks, which can be inflexible and usually take a 1 size fits all approach, different funding suppliers usually take a much a lot of in-depth view of a business and take under consideration the whole money picture when creating a funding call.

The fact that the UK economy is not out of the woods yet; underlined by comments by the Governor of the Bank of England “The UK economy has "only just started" along its road to economic recovery” is further justification that business owners need to be adequately funded. The Bank of England in its last Consumer Prices Index report stated that the UK will have slow recovery and not be in a state of prosperity until late 2011. This again further highlights the time scales involved.

Enable Finance Ltd are eager to speak with company owners and Managers about which alternative sources of funding are obtainable to them and their specific business. It should also be worth noting that even if a Company is facing insolvency proceedings or have been threatened with a winding up petition. The specialist business finance advisors may still have a solution and indeed help clear up the impending creditor pressure.