bank borrowing

Small Businesses Leverage Cashflow to Fund Growth

Small Businesses Leverage Cashflow to Fund Growth

More than half (59%) of Britain’s small firms are using cashflow to fund growth as many believe it’s too “expensive and time-consuming” to seek funding traditional lenders; the national Working Capital Outlook Survey by C2FO has reported. 60% of small businesses said it was too expensive to borrow from banks and the report found that only 30% of UK companies are able to borrow money for an APR of under 6% – with firms in the financial and insurance sector borrowing at the highest rate of approximately 7.2%. The survey featured over 400 small and medium businesses and quizzed them on a range of financial issues, including how they preferred to improve working capital and deal with late payments. While many business owners said they were trying to finance development using operational cash, ... »

Bank Borrowing

Cashflow problems increase bank borrowing

Late–paying customers are forcing small firms to increase their bank borrowing to maintain cashflow, according to the Federation of Small Businesses (FSB). Commenting on figures from the British Bankers’ Association (BBA) which revealed that bank lending to small firms (those turning over £1 million or less) increased by 11 per cent in the 12 months to June 2008, FSB public affairs spokesman Stephen Alambritis, said: “Businesses are not borrowing to expand, they are borrowing to keep still.” “We think lending is growing not because people are growing their businesses, but because small businesses are not being paid on time by the customers they supply. Businesses are having to go to the bank to pay their rent, rates and other bills — it is a worryi... »