Consider your funding options in the quest for economic
recovery, says Evette Orams of Hilton-Baird
Financial Solutions.
Go deeper with GlobalData
The Hilton-Baird Financial Solutions’ latest biannual
SME Trends Index reveals that only 31% of respondents
believed their business would expand over the next six months.
The result is that many owners are
cautious about investing in growth, preferring to horde cash for
tough times ahead. While this approach seems sensible, its
conservative nature is restricting the economy’s recovery, as one
respondent explained.
“We should be recruiting more
staff, but the economic outlook is so uncertain that we are holding
back on all major decisions,” wrote another respondent.
Respondents were keen to emphasise
the role the media. “It would be helpful if all types of the media
stopped spreading negative news,” wrote another respondent. “If
people feel there is hope, everyone can face the future with a more
positive outlook. Now there is never any good news.”
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By GlobalDataMore than a third were primarily
concerned about generating new business over the next six months
(34%), with a further 17% anxious about managing cash flow. The
inability to access funding (11%) and late payment (10%) were also
concerns.
“There is not enough money
circulating,” added another. “Small businesses cannot carry the
financial burden of non-payment of bills while the banks are not
prepared to facilitate credit to the level it is required.”
Despite this, our survey found 48%
of businesses were still relying on bank overdrafts to fund their
business.
Our message is that SMEs should
explore funding options. Invoice finance, for instance, is
increasingly available, as evidenced by the Asset Based Finance
Association’s statistics. The peace of mind this delivers together
with invoice finance’s other benefits, gave users a much brighter
outlook than average, with 50% expecting their business to expand
over the next six months, according to our Trends
Index.
It might be elusive, but confidence
will go a long way to shaping the economic recovery.
Evette Orams is managing
director at Hilton-Baird Financial Solutions
