Cash flow struggles restricting SME growth

10/07/2018

Almost half of senior decision makers feel that poor cash flow is stopping their small or medium sized business from scaling up, according to new research.

With late payment, rising business costs and the current economic uncertainty surrounding Brexit all putting pressure on cash flow, it’s perhaps not surprising that 46% of SMEs feel that cash flow struggles are distracting them from growth-related activities like product development and marketing.

The poll conducted by American Express revealed one in five feel that keeping on top of their cash flow is taking their focus away from finding and securing new business opportunities.

As well as this, a third of small firms that have missed a payment deadline have had suppliers withhold goods or services, 28% have had their relationship with suppliers tested because of their cash flow issues and 35% have had to cough up additional late payment fees for missing deadlines.

Further concerns

But, worryingly, the repercussions of poor cash flow management spread further than restricting business growth.

The research found that one in four are kept awake at night by cash flow issues and 24% are stressed for the same reason.

Despite this, only half of small business leaders said they use an accountant or financial adviser to help them manage their finances.

Instead, the credit card provider’s research showed many small firms are relying on short-term fixes to maintain cash flow, with 26% using an overdraft, and 12% looking to business loans.

This could be further restricting business growth as relying on the wrong facility for your needs can be detrimental to success.

If these statistics resonate with your experiences, here are a few articles we think will help:

To see if we could help your business improve its cash flow as an independent commercial finance broker, contact us on 0800 9774833 or email info@hiltonbaird.co.uk to discuss your requirements.