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SMEs seek accountants’ funding advice

Most business owners turn to accountants to provide advice on potential funding options, a study has found. 

Peer-to-peer finance firm MarketInvoice polled 3,874 businesses and found 56% went to their accountant for ways to boost their cashflow. 

A further 23% asked said accountants were twice as important as commercial finance brokers, while just 6% would speak to a bank.

Faced with a period of uncertainty, 38% of business owners said they were anticipating a cash squeeze over the next 6 months.

35% of those would turn to invoice financing, with overdrafts (30%) and credit cards (7%) other options for additional funding.

Businesses expressed some compromises would be made to manage the effects of negative cashflow, with 34% considering shelving plans for expansion.

A further 33% would hold off from launching new products and 20% would reduce their marketing spend.

Darvish Heshejin, head of partnerships at MarketInvoice, said:

“Accountants and commercial finance brokers are increasingly becoming the default go-to for advice on business finance, especially where funding is required quickly.

“It’s imperative these professionals are aware of the wider funding opportunities available to provide the best, most comprehensive advice to their clients and find the solution that fits.”

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Extra financial support for exporters

The UK’s export credit agency, UK Export Finance (UKEF), has joined 5 of the biggest high street banks to speed up the delivery of financial support to small business exporters.

SMEs with aspirations of selling goods abroad are able to access export-related trade finance, such as working capital loans and bonds required by overseas buyers.

The partnership will enable businesses in manufacturers’ and service providers’ supply chains to access trade funding with government support.

The model will roll out to 5 banks – Barclays, HSBC, Lloyds, RBS/NatWest and Santander – through a secured digital platform designed to make response times quicker and more efficient.

Liam Fox, international trade secretary, said:

“Providing that finance to suppliers as well as exporters means spreading the benefits of global trade, supporting more jobs and growth for companies large and small.”

Jeff Longhurst, head of commercial at UK Finance, added:

“The industry is committed to making it easier for UK exporters to access finance and UK Finance has worked closely with lenders and UKEF to make this process simpler. 

“With nearly 70% of international SMEs planning to grow in the next 12 months, today’s announcement is a boost for both SMEs and the wider economy, helping support businesses across the country.”

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Rejected contracts see SMEs miss out

Nearly half (47%) of small businesses lost out on up to £10,000 in the last year due to turning down work contracts and orders, according to a new study.

Out of 501 companies surveyed by Hitachi Capital Invoice Finance, 26% snubbed contracts worth up to £5,000 while 21% rejected contracts worth between £5,001 and £10,000.

Almost 1 in 5 (19%) turned away work because of unfair demands from customers, whereas only 8% rejected contracts due to lack of finances.

More established companies were less likely to reject contracts or orders, but reputable firms would lose more money than less established companies when they did turn away work.

Some of the reasons for companies turning down contracts and orders included:

  • contracts were priced too cheaply/would not bring in enough cash 
  • customers’ unreasonable demands
  • lack of finances/didn’t want to risk taking out a loan.

A further 66% have not invested personal funds into their company in the last 12 months, whereas 60% did so with their personal savings.

This disproportionally affected start-ups, with 50% investing in their personal savings compared to just 20% of established companies.

Comparing different regions, companies in Wales, London and Northern Ireland turned away the most work. 

The North East and the East Midlands saw a higher percentage of businesses reject less work than the year before.

Contact us to discuss your business finance.