Over the next six months, we expect to see more and more SMEs turning to financing to support their cash flow. Current economic challenges will only amplify this need with global supply chain issues, rising interest rates, soaring inflation, fuel costs and upcoming tax hikes, which threaten all the good progress companies have made over the past 12 months.
Our research continues to reveal that a lack of working capital is one of the biggest barriers to growth a business can face. In fact, more than one in three UK business owners believe access to finance will help them meet and overcome the economic challenges that 2022 continues to throw at them.
In a recent survey*, over 50% of financial advisors and accountants we spoke to highlighted Invoice Finance as a solution their B2B clients would likely turn to this year to free up working capital, overcome and seize new opportunities. But what makes Invoice Finance such an essential and popular solution in these times of economic turbulence?
According to our existing customer base, 73% turn to Invoice Finance solutions not only to improve their cash flow, but also to ensure that their employees, suppliers, HMRC and other financial commitments are paid on time. More than two in three told Time Finance that their bill financing system gave them peace of mind and greater financial freedom. More than half find it a more flexible solution than a bank facility, with the ability to raise or lower funding limits based on their current and future plans.
The benefits don’t stop there. A good funder and financial advisor will ensure their clients have a financial strategy in place to support their business when times get tough. Financial strategies should take a holistic view – taking into account the company’s history, current financial commitments as well as future growth plans. At Time Finance, we do just that.
The burden of repaying loans taken out during the pandemic is a reality that many businesses face, but it seems to be clouded by current market challenges. Just two months ago, 35% of businesses said one of their biggest concerns was the ability to repay those funds. One in five of our existing customer base said working with an invoice finance service provider made financial forecasting easier, and 73% said that as a result they are confident their lender has a good understanding of their business and the challenges they will face through 2022.
But, it’s not just about preparing for the bumps in the road and building up cash reserves. A cautious approach can be wise, but it can also risk leaving companies behind the competition. In fact, more than one in three clients tell Time Finance that they use Invoice Finance to support their investment and expansion plans. Over the next six months and with financial support in place, 45% will seek to invest in sustainable systems, operations, equipment and practices that strengthen their green agenda, while one in three will seek to invest in new ones. talents.
Invoice Finance continues to grow in popularity due to its personal approach to financing. Benefiting from a dedicated relationship manager and access to decision makers, business owners can ensure lucrative opportunities are not missed and decisions can be made quickly. So much so that 91% of clients rank a relationship-focused approach as the most important thing they look for in a funder, compared to just 64% who rank affordability at the top of their wish list.
There’s no doubt that clients who already benefit from Invoice Finance do so because it relieves pressure on their cash flow and gives them the financial freedom to grow and prosper, even when the going gets tough. But when it comes to supporting a business, of course, there are a number of other financial solutions that might be more appropriate for their situation. It is essential that these options are considered and presented to clients so that they can receive the right financial support from the start. This is one of the main reasons why Time Finance offers a wide portfolio of solutions – from asset finance, invoice finance, business loans, real estate finance and vehicle finance. This means that despite the challenges or opportunities ahead, we can help you.
*Time Finance survey of SMEs & Financial Intermediaries in March 2022