Using Debt Factoring to Survive the Economic Slump
Its now a blatant fact that the United Kingdom Economy is in decline and Company Directors interested in their Companies existence must have a plan or they will most certainly go into administration
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 Savvi the music retailer formerly Virgin Megastore.
One of the most well know victims of the recession is Woolworths that went into administration just before Christmas. Its final shops closed on January the 5th, resulting in 27,000 staff loosing their jobs.
Businesses wishing to survive the recession need to have 4 things; credible management team, a viable business core, a valid business plan and appropriate funding say The Turnaround Management Association
The credit crunch and lack of liquidity within the financial money markets has restricted traditional forms of lending from Banks into Businesses to very dangerous levels. This limitation of funding has implemented a Cash Flow Squeeze on British Business.
As a business owner one of the first things you should do to survive a economic downturn 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 location 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 unpredictable 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 Savvi the music retailer formerly Virgin Megastore.
One of the most well know victims of the recession is Woolworths that went into administration just before Christmas. Its final shops closed on January the 5th, resulting in 27,000 staff loosing their jobs.
Businesses wishing to survive the recession need to have 4 things; credible management team, a viable business core, a valid business plan and appropriate funding say The Turnaround Management Association
The credit crunch and lack of liquidity within the financial money markets has restricted traditional forms of lending from Banks into Businesses to very dangerous levels. This limitation of funding has implemented a Cash Flow Squeeze on British Business.
As a business owner one of the first things you should do to survive a economic downturn 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 location 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 unpredictable cash flow if customers are slow payers or they go into insolvency.
About the Author:
Enable Finance Ltd. are specialist providers of small business finance, helping business with dynamic and suitable business advice to speak with one of our business advisor's about alternative sources of funding such as Debt Factoring please feel free to contact our website and arrange a FREE consultation.
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