Reports of small businesses in the UK and Ireland struggling to maintain daily operations have been prevalent since the economic downturn hit home. However, now many are working with commercial finance brokers to deliver more effective funding.
According to a leading invoice and asset finance professional, the target is not only survival.
In an interview in April, the managing director of Bibby Financial Services Ireland, Graham Byrne, said that strategies were now being aligned for growth. He said:
“This is only possible when there are seeds of optimism within the lending environment. For the SME sector there continues to be uncertainty around credit availability and owner-managers still aren’t sure about banks’ appetite for lending.”
This restricted access to credit has been positive though, according to Byrne. He says it has allowed financial directors and key personnel to focus on better management of cash flow. He continued:
“A business can’t function without working capital. Companies are examining how best to utilise the assets within the business and raise capital within that framework, for example, by exploring alternatives such as invoice finance.”
It is not only in the SME sector that asset and invoice finance is helping. Many larger businesses are exploring alternative commercial finance, with Scottish factoring companies and brokers seeing increased business from household names.
Whilst recent years have seen invoice discounting and factoring facilities grow in popularity, the methods are far from being new ideas. It was back in the late 1960s and early 1970s that they were first made available.
