Factoring Finance blog – Drop in consumer confidence

The retail and leisure sectors and also the professional services industry have all reported a Q1 drop in demand, largely attributed to a UK wide drop in consumer confidence as the austerity measures take effect amid growing inflation, increased household and soverign debt, low growth rates and more job losses.

The recent data, published in a research document by insolvency specialist Begbies Traynor, reported that 186,554 UK businesses are now experiencing ‘significant’ or ‘critical’ financial problems, compared with around 161,000 in the first quarter of 2010, which equates to a 16% increase.

Analysts believe that shoppers are unwilling to shell-out for large purchases due to job insecurity and the knock-on effect from January’s VAT increase. However, the most recent insolvency statistics showed a sustained dip in the number of businesses filing for liquidation across many sectors, suggesting that opportunities for growth are beginning to arise, or as others suggest, that the inevitable is only being delayed by the HMRC time to pay scheme.

The VAT rise was somewhat unexpected by many as at a time when business and economic growth and consumer spending is so vital, why put on more burden? Surely it is in everyone’s interest to fuel demand, not stifle it with extra costs?

Either way, to ensure your business is protected against late or non-payments from a customer that may be experiencing financial problems, it is advisable to take advantage of a credit insurance policy and/or invoice finance products like invoice factoring, or invoice discounting, which can alleviate the problems associated with late payment and unlocked the cash tied up in your invoices.

Debtor Insurance provided by many of our suppliers generally safeguards companies from up to 90% of bad debt suffered as a result of customer insolvency.

For terms, more info, or a quote  on invoice discounting and invoice factoring simply 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 invoice finance deal for you and as such, we are not tied to any one provider, or bank!

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