Businesses rely on credit cards
Feb 10 2011
Some 44 per cent of companies use plastic as working capital
Almost half of small businesses rely on credit cards to fund their day-to-day operations.
Some 44 per cent of companies use plastic as working capital, despite the high interest rates associated with such borrowing, according to the six-monthly SME Trends Index from finance provider Hilton-Baird. More than 700 businesses were surveyed in the research.
Managing director of Hilton-Baird Financial Solutions, Evette Orams says, ‘It’s important to explore every viable route available to ease cash flow before making a decision on how to fund a business.
‘Tackling late payment is an ongoing challenge for most as it’s essentially a vicious cycle and the long-term health of a business is dependent on good cash flow.’
Comment by Richard Smith
Tuesday 15th February 2011The major issues we find with Small Business funding are outlined below, along with some possible solutions. Not all options have been considered. Often SME's pop down to their local bankers, get a refusal and then complain that 'no one is lending' often, a second approach is made to another bank, without changing any of figures/borrowing/plan and wondering why the decision is the same. It's because they are all bankers and the information presented all looks the same to them. The idea should be to present your business and your borrowing proposition in the best light possible, ask the question when you get a refusal and find out why. Take the blinkers off, sometimes you can find simple solutions to increasing cashflow buy using traditional methods, reducing the time given to your customers, and obtaining an increase in the time taken to settle your outstanding amounts. You will be surprised about how flexible everyone can be. Clients that wont pay on shorter terms or suppliers that cannot extend terms should be considered carefully. Now these are not the only solutions for your business funding, but will sure help. Take your blinkers off, consider all of the options (a walk in the park will help). Business finance is available, increasing profitablity can be done (even in this economy) but you can't think like the masses of businesses out there, or you will get the same as them. Richard Smith www.theinternetconsultancy.com Expert Advice and Small Business Guidance
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