According to a report by Lloyds Bank, reported on in October 2016 by BridgingAndCommercial.co.uk, SMEs are owed £586bn for unpaid invoices. This is an increase of 8% since January.
Late payments are the biggest cause of cash flow problems, and many businesses have said that they expect more customers to ask for deferred payment arrangements over the next few months.
Although the combined assets of small-to-medium business is estimated at £2.6 trillion, many companies are not investing in expansion because of poor cash flow. Lloyds believes that many firms are not knowledgeable about how to raise finance to cover temporary cash flow. For example, some are not aware of how short-term bridging loans can help.
Adrian Walker from Lloyds Bank said:
“The amount of money that firms have tied up in unpaid bills and other assets is significant, and this report suggests that these sums could be unlocked if businesses were more aware of the funding options that are open to them.”
Walker said that small businesses are vital to the UK economy, but many are held back through lack of available cash to invest in their business growth. He said that releasing cash through loans secured through unpaid invoices and other assets can accelerate business growth. He urged businesses to seek financial advice about their options.
A broker can source the best bridging loan deals for a business that needs temporary cash to cover expenses and liabilities until outstanding invoices are paid.
