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Cash flow concerns for small businesses

Aug 23 2010

Over one third of small businesses experienced cash flow problems during the past two years.

Research by commercial finance company IGF found that 32 per cent of companies suffered cash flow problems so severe that the survival of the business was threatened.

Tracey Ewen, managing director at IGF, says: ‘Cash flow is the oxygen of small businesses. SMEs have to think creatively about the potential sources of finances available.’

According to the study, companies experienced cash flow issues mostly due to debtors paying late (56 per cent), economic factors beyond their control (47 per cent) or loss of revenue (45 per cent).

The worst hit region of the UK was the East of England, with 46 per cent of companies experiencing cash flow problems in the past two years, compared with just 30 percent of businesses in London and the South East.

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