Invoice Financing up as Company Insolvency Figures Fall

With the news that in Q2 2010, the number of company insolvencies in England and Wales decreased by 19.1% year on year, but has increased by 0.5% compared to the first quarter of 2010, Edward Rimmer, UK chief executive of Bibby Financial Services, says:

“It is encouraging to see that the number of business insolvencies is in yearly decline, showing that the UK is finally recovering from the recession. But what is still of major concern is businesses are still suffering from a lack of access to finance and the liquidation of 4,080 businesses between April and June this year highlights that.”

“Measures such as the Enterprise Finance Guarantee and HMRC Time to Pay schemes, designed to increase the level of funding to businesses, are still struggling to have the desired effect and whilst tax deferments have provided a temporary measure to businesses during the recession, they are not long term funding solutions. Instead, the Government should be signposting businesses to funders which are able to support them, and are willing to supply a suitable finance option.”

“While businesses should review their finances immediately in order to avoid becoming another statistic, the finance industry needs to continue to educate the business community, and indeed Government, on the benefits of other accessible funding options. These choices include funding streams such as invoice finance, which is more flexible than any loan or overdraft, helping businesses improve their cashflow and chances of survival.”

“The step-change in open-minded finance for UK firms needs to come from the industry – by spreading the word about invoice finaning, we hope that these figures will look a lot different in 12 months time.”

“At a time when the UK economy has officially emerged from the recession, businesses should be looking to take advantage of new opportunities and fund growth plans, not struggling to chase payments and improve liquidity. Unlike banks, which can be inflexible and often take a ‘one size fits all’ approach, invoice finance 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.”

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