New research that has been published by Purbeck Personal Guarantee Insurance (via Credit-Connect.co.uk) has found that over half of SMEs are in need of cash to survive. Those businesses will be looking to the Recovery Loan Scheme to help.
What does the research say?
Credit-Connect reported that:
A survey of 1000 SME business owners and directors has found that over half will seek new finance in 2021. 54% of these businesses plan to use the newly launched Recovery Loan Scheme to help their business’s cash flow with 22% planning to borrow over £250,000 through the scheme, becoming Personal Guarantors for the loan in the process.
The survey found that the Bounce Back Loan Scheme was the main source of funding in 2020, however, close to a third, 27%, used a credit card facility to keep business going while 30% called on an overdraft facility, potentially incurring high fees and interest charges. 18% used asset finance and 15% called on the support of friends and family. This trend looks set to continue in 2021.
Key sources of funding for SMEs in 2021:
- Recovery Loan Scheme 54%
- Credit Card Facility 28%
- Overdraft 19%
- Alternative Finance Provider 15%
- Fresh Investment 15%
- Asset Finance 13%
- Friends and Family 12%
While the findings underline the continuing financial challenges for SMEs caused by the pandemic, with 43% seeing a fall of more than 25% in their income, for 38% of the SME business owners surveyed, 2020 was a year of income growth.
Sean Husband, Director of My Debt Recovery has urged businesses to reach out before they embark on a journey with business finance.
He said, “There is no doubt that the last twelve months have been incredibly difficult for many businesses who are finding themselves in difficult financial situations, Seeking finance can be the right move for a business in need of a cash injection quickly. But if a business is wary of committing to a loan (or similar finance) then alternative methods of raising capital are available.
“We can help businesses unlock funds that are being held up in late or ignored invoices by utilising all forms of commercial debt recovery at our disposal. Many SMEs, in need of cash to survive, are owed hundreds, if not thousands of pounds in late payments and those funds are the vital cash flow that enables a business to reinvest and grow. By recovering these debts, a business can push forward, without a long term commitment to business finance and the potential interest charged on top. Our team of experts are here to help and we’ll analyse your case and have an open and honest discussion with you about the way forward.”
My Debt Recovery operates on a no collection, no fee basis. We will take on your case and aim to recover outstanding monies owed to your business. This can help to bolster your financial position and cash flow immediately, once returned. Reach out to our team today, we’re ready and waiting to help: contact us.