For businesses across the country, the Christmas period is a double-edged sword; while there are often opportunities to increase sales and expand, there is an equal risk of missing openings and allowing competitors to get a head start in the new year.
Maintaining a smooth, fluid cashflow is always important – but it becomes doubly essential during the festive season.
Tracy Ewen, the managing director of commercial finance provider IGF, recently highlighted the issue in an article on the group’s website. She said:
“The Christmas period and the first weeks of January are often a critical time for small businesses – almost as many managing directors, clerical assistants and finance department staff are on holiday over Christmas and the New Year as during the summer.
“As a result, payments don’t get made, cheques don’t get signed and small businesses often experience real problems with cashflow at this time.”
Of course, covering for human error is a good reason for firms to consider viable cashflow solutions, but alternative finance options will likewise give a business the opportunity to experience growth.
For instance, an invoice finance facility will ensure that a company gets paid – regardless of whether or not its clients settle their invoices on time. For example, a retail firm in Glasgow could use invoice discounting to make the most of the festive deluge by hiring additional members of staff and taking on larger orders.
It seems that, on the whole, businesses are wising up to the alternatives available to them on the finance front. Recent figures from the Asset Based Finance Association (ABFA) show that, while banks lent £1.4bn less to SMEs in Q3 of this year, asset-based lending increased by 14% in 2013 against figures from 2012.
Further, the ABFA report found that smaller businesses, in particular, are benefitting from asset-based solutions; more than a third of the surveyed companies that use asset finance have a turnover of less than £500,000.
Business owners unsure of the options open to them should speak to a reputable commercial finance broker today, making sure they’re in a position to grow this Christmas.