If you haven’t heard the grim news, the UK is facing its second recession in four years. The economy shrunk by 0.3% in the last quarter of 2023, following a 0.1% decline in the previous quarter.
A recession is defined as two consecutive quarters of negative growth in gross domestic product (GPD). It means less money, less demand, and less funding for businesses.
If you’re a business owner, you may be wondering how to survive and thrive in this tough environment. You may be facing:
- Reduced cash flow due to delayed payments from customers.
- Increased risk of bad debts due to customer insolvency or non-payment.
- Decreased flexibility due to fixed overheads and long-term commitments.
- Limited growth opportunities due to lack of working capital and market demand.
- Reduced competitiveness due to the inability to offer attractive terms or discounts to customers or suppliers.
But don’t fret. There is a solution that can help you overcome these challenges and grow your business with confidence: invoice finance.
Invoice finance is a form of funding that allows you to access up to 90% of the value of your unpaid invoices within 24 hours, instead of waiting 30+ days to get paid. It also helps manage the risk of the business by credit checking customers.
How Invoice Finance can Help During a Recession
Improve Cash Flow
Without cash flow, you can’t pay your bills, your staff, or your suppliers. It’s the lifeblood of any business. But cash flow can be a challenge for many businesses, especially during a recession.
According to the Federation of Small Businesses, late payments are a major issue for 62% of small businesses in the UK, with an average delay of 36 days. This means that many businesses are stuck with a cash flow gap between delivering their goods or services and receiving payment from customers.
Invoice finance can help you bridge this gap and improve your cash flow and liquidity. With invoice finance, you can get immediate access to a percentage of their value, usually between 80% and 90%. The remaining balance, minus a fee, is paid to you when your customer pays the invoice.
This means you don’t have to wait for your customers to pay you. You can get paid as soon as you issue your invoice. Allowing you to use the money straight away to cover your expenses, pay your staff, or invest in your business.
Improve Cash Flow
Flexibility and adaptability are essential for any business, especially during a recession. You need to be able to respond to changing market conditions, customer needs, and opportunities. You need to be able to adjust your funding level to your sales volume.
Invoice finance can help you by providing a flexible and scalable form of funding that grows with your business. This means that you can access more funding as your sales increase. You can also choose which customers to invoice depending on your cash flow needs.
Support Growth
Growth and expansion are the goals of any business, especially during a recession. You want to be able to hire more staff, buy more equipment, or open more locations. However, growth requires working capital, which can be hard to come by during a recession. Banks and other lenders may be more cautious or restrictive in lending you money, especially if you’re a smaller business.
Invoice finance can help you support your growth by providing working capital to invest in your business. The finance provider gives you money based on your invoices, which reflect your sales and potential. You can use the money to grab new opportunities, expand into new markets, or launch new products or services.
Enhance Competitiveness
Competitiveness and profitability are the measures of any business. You want to be able to offer better deals or discounts to your customers or suppliers. Or negotiate better terms or prices with them. This can be hard to achieve, especially in a recession. You might be competing with other businesses that have more resources or advantages. You may also have to deal with lower demand, higher costs, or thinner margins.
Invoice finance can help by enabling you to negotiate better terms or prices with suppliers or customers. Because of the immediate cash flow, you can have more bargaining power and leverage. This way, you can attract more customers, retain more suppliers, and increase your sales.
Invoice Finance Success Stories
Don’t just take our word for it. Here are some success stories from our customers who have used invoice finance and benefitted from it.
How to Get Started with Invoice Finance
If you’re interested in using invoice finance to save your business from a recession, you’re in the right place. We’re here to help you get started with invoice finance in three easy steps:
STEP 1: Contact us for a free consultation. We’ll discuss your business, needs, and explain how invoice finance works.
STEP 2: We’ll then ask you to complete an application form and send over any necessary documents. Once approved, we’ll get you set up with a facility.
STEP 3: Upload your invoices to the portal and get paid instantly. We’ll provide you with a unique log-in to manage your invoices and payments.
That’s it. You’re now ready to use invoice finance!
Don’t let the recession hold you back! Contact us today and find out how invoice finance can save your business from a recession.
