Cashflow Finance is wrongly seen as a lending facility favoured by businesses in trouble, however the majority of businesses seeing the most benefit of opting for to use invoice discounting or factoring instead of a traditional overdraft facility is the ability to take on new or larger contracts to enable the business to grow.

North East companies have billions of pounds tied up in excess working capital which could be used to fund growth, according to new research by Lloyds Bank Commercial Banking.

The report warns that businesses could be left ill-prepared to deal with unforeseen opportunities and challenges as a result.

Lloyds analysed 5,000 UK businesses and found those in the North East have about £116.4bn tied up in working capital, the equivalent of 8.9 per cent of their total revenue.

Simon Quin, area director for global transaction banking in the North East of England, said: “Revenue growth is good news for any business, but to improve efficiency is going to take investment and that requires cash flow. “Small firms in particular are taking even longer to free up cash from things like inventory and unpaid invoices. The longer that money remains unavailable, the less firms can invest in growth, new machinery or pay down debts.”

Nationally, the amount of money tied up in working capital jumped by 37 per cent in the past 12 months to £680bn.
A business owed £100,000 by its clients could raise £80,000 to facilitate growth and take on additional staff or source stock at more preferential rates by buying in bulk or paying their suppliers quicker.

We have access to most cashflow finance providers, many of who only deal with intermediaries and specialise in sectors that traditional lenders tend to avoid. If you would like to find out more about cashflow finance please contact the team on 01482 635400 or click this link to take you to our contact form.

Source of information for this article was first published on 21st May 2018 by Insider Media.

Please contact a member of the team on 01482 635400 or click here to leave your details and a member of the team will contact you to review your Working Capital requirements with you at any time.