A recent report has uncovered that almost 50 per cent of small to medium sized enterprises (SMEs) in the UK are facing cash flow difficulties.
Around 46 per cent of SMEs surveyed commented that their cash flow problems were predominantly driven by increasing costs. However, 37 per cent of respondents underlined late payments from customer and client as a key cause, with this issue affecting smaller firms more than larger companies.
Other drivers impacting cash flow included seasonality and volatility of sales (25 per cent), unanticipated expenses (26 per cent) and general slow sales (27 per cent). Complexity of supply chains was also listed as a factor affecting access to cash.
The research revealed that cashflow was a significant cause of stress for enterprises. A total of 38 per cent of decision makers admitted cashflow impacted them and senior managers at their companies. Approximately 20 per cent of business owners commented that such situations had negatively affected their mental health, while over 30 per cent had concerns that cashflow problems were harming staff morale.
Many businesses also commented that cashflow problems had hampered their plans for growth. To alleviate the issue, 32 per cent of SMEs had considered taking a business loan to support their needs.
In the UK, companies often apply for SME business loans to offset issues affecting cashflow. Loans can help firms secure expensive equipment, expand, cover quiet periods and unexpected costs without putting pressure on available working capital required for day-to-day operations.
