Following news from the Insolvency Service showing a 51* per cent rise in the number of firms going bankrupt in the last quarter of 2008, Bibby Financial Services, the UKís leading independent invoice financier, is urging small and medium sized firms to consider all options before they face insolvency.
While the latest CBI Access to Finance** figures show a marked decline in firmsí ability to access credit, alternative finance providers are actually increasing the amount theyíre advancing to small and medium sized businesses.
Indeed, last year alternative finance providers advanced 18 billion*** to struggling UK firms - 276 million of which was advanced by Bibby Financial Services, an organisation open for business when many traditional providersí doors are closing.
However, research among finance professionals conducted by Bibby Financial Services**** at the end of 2008 showed 80 per cent believed poor cash flow was the biggest cause of business failure in 2008, and yet 73 per cent rated small businessesí understanding of the range of finance options available to them as average or below, meaning there could be many businesses failing before theyíve even considered all the funding options available to them
Ed Rimmer, chief executive, UK and Ireland, Bibby Financial Services said: ìDespite Government attempts to increase funding available to small and medium sized businesses, traditional bank lending remains tight, so business owners are seeking funding elsewhere, and discovering that many credible forms of finance exist beyond the high street names.
ìDue to a lack of understanding invoice finance and other alternative funding solutions have often been off the radar for many small and medium sized businesses but now many business owners are beginning to realise the benefits of taking control of their cashflow before itís too late.
ìAs demonstrated by our increasing funding levels at Bibby Financial Services with 340m to help UK owners and managers, our doors are wide-open to all small and medium sized businesses who are looking for independent alternative funding solutions, may have been rejected elsewhere, or simply those who would like more information about the finance options available to them.
ìUnlike traditional banks, which can be inflexible and often take a ëone size fits allí approach, alternative funding providers typically take a much more in-depth view of a business and take into account the entire financial picture when making a funding decision. And so Bibby Financial Services, and other alternative funding providers, are very much still open for business when the banks may not be.î
*Insolvency Service, 6 February 2009
**CBI Access to Finance, January survey published 9 February 2009
***ABFA statistics www.abfa.org.uk
**** Bibby Financial Services research took place in November 2008 among a national sample of 97 accountants and finance brokers.
Alternative finance the key for small firms in wake of recession
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