Using Debt Factoring to Survive the Economic Slump
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.
Stores and Companies to be effected by the economic downturn are Savvi the music retailer formerly Virgin Megastore, Adams the Independent childrens clothes retailer, USC the Fashion store and Whittard of Chelsea, the specialist tea and coffee retailer.
Another victim of the recession has been our beloved Woolworths that went into administration just before Christmas and saw its final stores close on the 5th of January 2009, which has left 27,000 people facing redundancy.
Businesses wishing to survive the recession need to have 4 things; credible management team, a viable business core, a valid business plan and appropriate funding say The Turnaround Management Association
Traditional sources of finance have been restricted to very low levels due to the Credit Crunch and lack of liquidity within the money markets. This constriction of lending has brought about a Cash Flow squeeze on UK plc.
Company Directors with an eye on survival should immediately have a plan to reduce expenditure within the business. Carefully review expenditure to identify any areas of your business where savings can be made. Meticulously going over the Companies expense to find areas where costs can be cut. You should look at Telephone Charges and Tariffs, Utilities, Trade Suppliers, transport costs. The accumulation of a number of cost saving can be remarkable.
Cash is King and Company Directors looking to avoid the pain caused by an economic downturn should seek out alternative sources of funding such as debt factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of debt 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 finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to unpredictable cash flow if customers are poor payers or they go into insolvency.
A record number of companies and shops went into insolvency over the Christmas period caused by the really awful trading conditions.
Stores and Companies to be effected by the economic downturn are Savvi the music retailer formerly Virgin Megastore, Adams the Independent childrens clothes retailer, USC the Fashion store and Whittard of Chelsea, the specialist tea and coffee retailer.
Another victim of the recession has been our beloved Woolworths that went into administration just before Christmas and saw its final stores close on the 5th of January 2009, which has left 27,000 people facing redundancy.
Businesses wishing to survive the recession need to have 4 things; credible management team, a viable business core, a valid business plan and appropriate funding say The Turnaround Management Association
Traditional sources of finance have been restricted to very low levels due to the Credit Crunch and lack of liquidity within the money markets. This constriction of lending has brought about a Cash Flow squeeze on UK plc.
Company Directors with an eye on survival should immediately have a plan to reduce expenditure within the business. Carefully review expenditure to identify any areas of your business where savings can be made. Meticulously going over the Companies expense to find areas where costs can be cut. You should look at Telephone Charges and Tariffs, Utilities, Trade Suppliers, transport costs. The accumulation of a number of cost saving can be remarkable.
Cash is King and Company Directors looking to avoid the pain caused by an economic downturn should seek out alternative sources of funding such as debt factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of debt 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 finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to unpredictable cash flow if customers are poor payers or they go into insolvency.
About the Author:
Debt Factoring is provided by the Asset Based Lending team of Enable Finance Ltd. Enable Finance are specialist small business finance brokers providing British business access to traditional and different types of credit. For a free meeting please contact the Business Refinance Team.
posted by Credit Counseling at
3:47 AM
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