Nearly half of UK businesses rely on
“unreliable funding methods” such as credit cards, according to
finance broker Hilton-Baird Financial Solutions’ SME Trends
Index.
The six-monthly survey of 717 business and
financial directors showed 44% are using their plastic as working
capital and 49% of SMEs turn to bank overdrafts to fund their
business.
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Hilton-Baird found 19% of those questioned use
invoice finance solutions such as factoring and invoicing
discounting to fund their business.
“It’s important to explore every viable route
available to ease cash flow before making a decision on how to
fund a business,” said Evette Orams, managing director of
Hilton-Baird Financial Solution.
“Tackling late payment is an ongoing challenge
for most as it’s essentially a vicious cycle and the long-term
health of a business is dependent on good cash flow.”
Statistics showed 50% of invoice finance users
saw an increase in turnover over the six months ending November
2010 compared to 45% of overdraft users and 42% if credit card
users.
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