How to Use Debt Factoring and Survive the Recession
There is no avoiding the issue the UK Economy is in recession and if you are a business owner you must have a plan to survive this economic slump or you will most certainly fail.
A record number of companies and shops went into insolvency over the Christmas period caused by the really awful trading conditions.
The following stores and Companies, to name a few, have gone into administration. Wedgewood the fine China and tableware manufacturer has gone along with Savvi, USC the Fashion store and MFI the furniture retailer.
Possible one of the most high profile causalities of the economic collapse has been woolworths that went into administration in December 2007 and finally closed all retail outlets in January which has put 27,000 out of work.
A business owner should be thinking how can I survive this economic slump? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding.
British Business is now facing a Cash Flow restriction caused by the credit crunch and and freeze in the capital markets forcing Companies to search out unconventional methods of finance
As an economy enters into recession one of the first thing a business should start consistently doing is keeping a tight rain upon costs. A firm hand upon expenses can save a business. Look at shipping costs, promotion and marketing, business premises and even the simplest things such as turning off the office lights at the end of the working day.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of finance such as invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice finance provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the factoring company will recover the money provided to you initially from any further invoices which are factored. This can lead to erratic cash flow if customers are slow payers or they go into insolvency. - 16931
A record number of companies and shops went into insolvency over the Christmas period caused by the really awful trading conditions.
The following stores and Companies, to name a few, have gone into administration. Wedgewood the fine China and tableware manufacturer has gone along with Savvi, USC the Fashion store and MFI the furniture retailer.
Possible one of the most high profile causalities of the economic collapse has been woolworths that went into administration in December 2007 and finally closed all retail outlets in January which has put 27,000 out of work.
A business owner should be thinking how can I survive this economic slump? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding.
British Business is now facing a Cash Flow restriction caused by the credit crunch and and freeze in the capital markets forcing Companies to search out unconventional methods of finance
As an economy enters into recession one of the first thing a business should start consistently doing is keeping a tight rain upon costs. A firm hand upon expenses can save a business. Look at shipping costs, promotion and marketing, business premises and even the simplest things such as turning off the office lights at the end of the working day.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of finance such as invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice finance provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the factoring company will recover the money provided to you initially from any further invoices which are factored. This can lead to erratic cash flow if customers are slow payers or they go into insolvency. - 16931
About the Author:
Debt Factoring is provided by the Asset Based Lending team of Enable Finance Ltd. Enable Finance are professional corporate finance brokers providing UK business access to traditional and different types of credit. For a free consultation please contact the Business Refinance Team.
posted by Edgar at
04:02
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