Small firms key to strengthening the recovery

The Federation of Small Businesses (FSB) has called on the Government to create a country fit for entrepreneurs. The
National Chairman John Walker was speaking to delegates in the FSB’s Annual Conference in Liverpool, when he urged Government to consider that ‘small businesses are key to sustaining economic recovery across the UK.

Mr Walker called for; the extension of the national insurance contributions holiday to include existing businesses and the introduction of a fuel duty stabiliser to help firms’ cash-flow.

During his opening speech, Mr Walker also highlighted the FSB’s key achievements since the Coalition Government came to power. These include: the extension of the Enterprise Finance Guarantee, the re-introduction of the Enterprise Allowance Fund and a firm commitment to reduce regulation.

Mr Walker urged FSB members to go back to their local constituencies and put the message to their MP’s. Whilst the Government has committed to making the procurement process easier for small firms around the country many are sceptical as little has been done to allow smaller firms to enter tender negotiations and the entry criteria to tender in the first place are set up for larger firms and not newer SME’s or start-ups. When you consider that start-ups are the target group to shoulder the brunt of the spending cuts, many have criticised government for sending out mixed messages, especially when funding and support bodies for start-ups has also been cut.

Mr Walker, went on to say:

“The UK’s 4.8 million small businesses are best placed to help the recovery, but they need a helping hand. We need to see the Chancellor….to create a country fit for entrepreneurs by providing incentives for businesses to take on staff and for self-employment to become a viable choice for the unemployed.”

Financing Start-ups?

Unlike traditional bank lending, which is as rarely available to start-ups invoice finance facilities such as factoring or invoice discounting don’t require the levels of security that banks demand as the outstanding sales invoices provide the security. As such, most banks simply wont lend to start-ups and as such, many are cut off from vital sources of finance that are required in the first year of trading, when cash flow problems are at their highest.

In most circumstances only those businesses with adverse credit or out of the ordinary trading circumstances will be refused invoice finance, and as the security required is the invoices, personal guarantees are not usually required. Furthermore, factoring finance providers will also assume a level of credit control management in securing payment for a start-ups’ outstanding invoices, giving them more time spend on the business. As such, the support that factoring providers offer over and above the finance itself can be critical success factors to many start-ups and micro businesses, where the resources and know how to manage such business critical process as credit control, are not evident.

There are many different factoring and invoice finance companies available to start-ups and a good factoring broker such as Factoring Finance will be able to point you in the right direction and find the best provider and the best deal to suit your needs.

For more info on invoice discounting and invoice factoring or a quote on the best deals from numerous small business finance providers, pick up the phone or use our ‘Am I eligible’ tool via the site for further details.

Factoring Finance has a UK wide, independent broker network able to source the best deal for you and as such, we are not tied to any one provider, or bank!

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