Short-term finance solutions can drive growth for SMEs

Brought to you by Wesleyan Bank

UK SMEs could be missing out on maximising growth opportunities due to a lack of available working capital.

Businesses subjected to seasonal variations are affected by fluctuating cash flow levels which diminish their ability to invest in new equipment and technology or hire staff.

Research compiled by the Government's Business Innovation and Skills department found that 71% of businesses only look ask one financial provider for support (usually their bank). If they are turned down, they don’t ask other lenders for assistance, potentially missing out on other opportunities.

The economic uncertainty has created a 'non-borrowing' culture. However, Wesleyan Bank's SME Attitudes to Finance report highlights that SME owners are becoming more receptive to exploring alternative finance options which can take them to the next level.

SMEs' contribution to the UK economy is set to grow by 20% to £240bn by 2025 according to the Centre of Economics and Business Research. But businesses that are unable to self-fund expansion should consider exploring alternative finance solutions to capitalise on new opportunities.

Boost cash flow and free-up working capital

Tying up cash by paying upfront for short-term expenditures can place a substantial strain on a business's finances, even when you have planned for them. Specialist providers, such as Wesleyan Bank, offer tailored finance solutions to hep SMEs maintain working capital and protect cash flow.

These include spreading the cost of your tax (6 or 12 months) and VAT liabilities (3 - 12 months) with a flexible short-term loan. By doing so, SMEs gain more predictability over their expenditure, allowing them to smooth over peaks and troughs throughout the year.

Benefits of alternative lenders

Choosing an alternative lender for a short-term working capital facility can offer numerous benefits in various areas such as:

  • Repayment terms: Alternative lenders can generally offer more flexible terms than high street banks.
  • Fast application: SMEs can conveniently apply online in minutes.
  • Overdrafts: High street banks are reducing and even withdrawing overdrafts, restricting capital for hundreds of thousands of British businesses. Alternative finance options can offer better options that businesses should be informed about.

Talk to your bank but prepare to be open-minded by comparing which providers are best placed to support your business at every stage of its life cycle with a range of tailored and flexible finance solutions.

For further information, contact the Wesleyan Bank team at [email protected] or call 0800 980 9348.