Debt Factoring Could Help Business Survival in the Recession
There is no avoiding the issue the UK Economy is in recession and if you are a business owner you must have a plan to survive this economic slump or you will most certainly fail.
Tough trading over Christmas and the New Year period has seen an unprecedented number of high street retails go into administration or liquidation.
Retailers and Businesses that have already been bore the brunt of the recession and have had to go bankrupt are MFI the furniture retailer, Whittard of Chelsea, the specialist tea and coffee retailer. and Wedgewood the fine China and tableware manufacturer.
Possible one of the most high profile causalities of the economic collapse has been woolworths that went into liquidation in December 2007 and finally closed all retail outlets in January which has put 27,000 out of work.
A business owner should be thinking how can I survive this economic downturn? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding.
Traditional sources of finance have been restricted to very low levels due to the Credit Crunch and lack of liquidity within the money markets. This constriction of lending has brought about a Cash Flow squeeze on UK plc.
As a business owner one of the first things you should do to survive a recession is cut costs. Carefully review expenditure to identify any areas of your business where savings can be made. Look at transport costs, advertising, marketing, business premises and even the smallest things such as turning off the office lights at the end of the working day. Simple measures can give rise to immediate benefits for little or no pain.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of finance such as invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice finance provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to random cash flow if customers are slow payers or they go into insolvency.
Tough trading over Christmas and the New Year period has seen an unprecedented number of high street retails go into administration or liquidation.
Retailers and Businesses that have already been bore the brunt of the recession and have had to go bankrupt are MFI the furniture retailer, Whittard of Chelsea, the specialist tea and coffee retailer. and Wedgewood the fine China and tableware manufacturer.
Possible one of the most high profile causalities of the economic collapse has been woolworths that went into liquidation in December 2007 and finally closed all retail outlets in January which has put 27,000 out of work.
A business owner should be thinking how can I survive this economic downturn? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding.
Traditional sources of finance have been restricted to very low levels due to the Credit Crunch and lack of liquidity within the money markets. This constriction of lending has brought about a Cash Flow squeeze on UK plc.
As a business owner one of the first things you should do to survive a recession is cut costs. Carefully review expenditure to identify any areas of your business where savings can be made. Look at transport costs, advertising, marketing, business premises and even the smallest things such as turning off the office lights at the end of the working day. Simple measures can give rise to immediate benefits for little or no pain.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of finance such as invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice finance provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to random cash flow if customers are slow payers or they go into insolvency.
About the Author:
Invoice Factoring is provided by the Asset Based Lending team of Enable Finance Ltd. Enable Finance are professional corporate finance company providing UK business access to traditional and alternative sources of finance. For a free meeting please contact the Business Refinance Team.
posted by Debt Consolidation Loan at
2:14 PM
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