HSBC has moved to encourage SMEs to consider invoice finance when combating late payment and cash flow issues.
According to research by BACS Payment in March 2009, payments owed to SMEs have risen by almost 40 per cent in the last year to £26 billion and many businesses are caught in an unsustainable cycle of companies billing quicker and taking longer to pay.
Figures show that SMEs are being forced to wait up to six weeks after the agreed payment date to receive payment.
Yet, says HSBC, just one in 10 businesses are currently using invoice finance to free up their cashflow according to research from HSBC Commercial Banking.
With cash released – in most cases – within one day of the invoice being issued, invoice finance makes funds available which can enable SMEs to respond quickly and decisively in challenging market conditions.
With the recession placing increased pressure on UK businesses – 64 per cent of SMEs say that managing cashflow in the current economic climate is their biggest challenge for growth.
Effectively managing cashflow is just one of the tips included in an online video launched by HSBC Commercial Banking which features a collection of stories from real businesses, practical advice from financial specialists and economists offering top tips on beating the credit crunch.
Noel Quinn, HSBC’s head of commercial banking UK, said: “We are urging businesses to ensure they have the right financial tools in place and are seeking appropriate advice to help them weather the storm. Ultimately a healthy cashflow is critical in a downturn and businesses do have the option, through invoice finance, of working with a financial partner to implement their payment collections on their behalf – allowing them to focus on the running of their business.
“We understand the pressure that businesses are under in the current climate and in a bid to alleviate some of the pressure we have already announced the availability of a £1 billion working capital fund which has been specifically designed to assist SMEs and make the day-to-day running of business more manageable.”
Contributed by BCR Factorscan www.factorscan.com
Commercial Finance Today
May 4th, 2009 at 12:39 am
Hi, interesting post. I have been pondering this issue,so thanks for writing. I’ll definitely be coming back to your posts.
July 8th, 2009 at 7:15 am
It’s a nice and great blog.
Thanks.
October 24th, 2009 at 5:20 pm
Fair play to HSBC Invoice Finance. As a lender they always stick to their principles in good times and bad. Their criteria may be fairly tight and inflexible but you have to say that they are consistent.
Clients they take on usually receive an excellent service as they are not fighting fires with ‘poor clients’ who may be high risk. All clients get the attention they deserve.
Obviously if you fall outside their criteria this is little help but if they do offer their services you will receive transparent pricing and good service levels.