Member Article

Number of South East SMEs facing cashflow difficulties drops

The number of businesses experiencing difficulties with their cashflow in the South East of England remained low in the second half of 2014, as overall business confidence fell due to concerns about the global recovery.

The latest Business in Britain report from Lloyds Bank, which canvasses the opinions of 1,500 small and medium-sized businesses, shows that fewer than one in five South East businesses (16 per cent) in total are facing difficulties with cashflow.

While this represents only a modest improvement in the past 12 months – down from 23 per cent of businesses in the region a year ago – concerns about cashflow have fallen from almost a third (30 per cent) in 2013.

The improving cashflow situation comes at the same time that the Business in Britain report’s key confidence index shows that UK business confidence fell by 10 points from a record high of 53 per cent six months ago to 43 per cent.

Andy Styles, South East area director for Lloyds Bank Global Transaction Banking, which provides alternative sources of financing for customers including asset based lending and trade finance, said: “Cashflow ought to be the most important focus for any business, so the fact that relatively few have concerns in this area is very positive.

“As the economy recovers, one of the biggest risks to businesses – especially smaller businesses - is the threat of overtrading. This is where busineses take on more work than they can afford to deliver, creating a cashflow crunch.

“The fact that this does not appear to be happening, and that the number of businesses with cashflow worries has in fact stabilised over the past 12 months is also encouraging, especially amid concerns about global growth and weakening business confidence.”

This was posted in Bdaily's Members' News section by Ellen Forster .