Business confidence has hit some record lows throughout the pandemic and many have cut spending and investment to survive. Government-backed loans and schemes, such as furlough, have been a lifeline for many. There is still a long way to go, and the end of the furlough scheme, coupled with the need to pay back bounce back loans, could spell trouble for some businesses. However, new research from Aldermore Bank shows that SME confidence is rising.
The research shows that small and medium-sized enterprises are looking to invest in their businesses as we continue to move forward after the coronavirus pandemic. In February 2021 business owners were looking to invest an average of almost £98K into their businesses. However, this has now increased to almost £284K, a rise of 190%.
44% of the businesses surveyed said that they will be looking to spend money on new equipment and 42% said they were looking to invest in technology, hoping to give them a competitive edge throughout the future of their trading. Encouragingly, 36% of businesses are looking to invest in greener and more sustainable ways to run their business. This particular statistic has increased from 10% just six months ago.
One key takeaway from the pandemic was the need for businesses to have an online presence. This is highlighted in the new research from Aldermore Bank as over a third of the respondents were looking to invest in strengthening the business’s online activities.
It is clear that many business owners intend to not just survive the next few months but push their business forward and achieve growth. But, the growth will come at a financial cost and will require a strong and sustainable positive cash flow. It is vital that businesses prepare for investment, some may be considering a form of business funding. However, it is important to ensure that you have robust credit control practices and payment terms in place.
Business funding such as asset finance and business loans will inevitably need to be repaid and without a stable income, your business may struggle to make the required repayments. Invoices should be followed up and chased on a regular basis to try to encourage your clients to meet your payment terms. It was also recently reported by the British Chambers of Commerce and Funding Circle, That SME businesses are concerned about access to funding becoming more difficult due to the impact of late payments on their cash flow.
But have you ever considered how much investable capital is sitting in your debt ledger? The current amount of debt owed to UK SMEs Is roughly £17.5 billion. That equates to an average of over £20,000 per business. You could unlock access to these funds by employing an expert third party to recover the monies on your behalf in an efficient and professional manner, enabling you to continue working with your client if you so wish.
We work on a no collection, no fee basis and we can progress to legal action if necessary, at no cost to you when you use our Escalate service. If the debt is less than six months old, we will only charge a maximum of 15% of the debt and 90% of our cases are settled before the need for enforcement.
So if you need to reach out to our team, give us a call on 0800 009 6106 or drop us an email.