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Short-term finance solutions can drive growth for SMEs

Short-term finance solutions can drive growth for SMEs

Could UK SMEs be missing out on maximising growth opportunities due to a lack of available working capital?

Seasonal variations mean that some businesses are often hampered by fluctuating cash flow levels which hinder their ability to invest in new equipment and technology or hire more staff to fulfil customer demand.

Research compiled by the Government's Business Innovation and Skills department found that 71% of businesses will only approach one financial provider (usually their bank) for financial support. In the event of them being turned down, they are unlikely to approach rival lenders for assistance.

Adopting such an outdated approach may mean that thousands of UK SMEs are currently missing out on fulfilling their potential. Are you one of them?

It's only natural for small businesses to be cautious about making a financial investment, however there's an equal risk in failing to seek support for growth.

Although continued economic uncertainty may have instilled a 'non-borrowing' culture into the mindsets of many SME owners, Wesleyan Bank's SME Attitudes to Finance report highlights that firms are becoming more receptive to exploring alternative finance options which can serve as a catalyst to take them to the next level.

A Centre of Economics and Business Research report highlights that SMEs' contribution to the UK economy is set to grow by 20% to £240bn by 2025. But those businesses that are unable to self-fund expansion should consider exploring alternative finance solutions to capitalise on new opportunities.

Boost cash flow and free-up working capital

Tying up cash by paying upfront for short-term expenditures can place a substantial strain on a business's finances, even when you have planned for them. Specialist providers, such as Wesleyan Bank, offer tailored finance solutions to hep SMEs maintain working capital and protect cash flow.

These include spreading the cost of your tax (6 or 12 months) and VAT liabilities (3 - 12 months) with a flexible short-term loan. By doing so, SMEs gain more predictability over their expenditure, allowing them to smooth over peaks and troughs throughout the year.

Choosing an alternative lender for a short-term working capital facility can offer numerous benefits. Repayment terms are generally more flexible than high street banks can offer and applications can conveniently be made online in minutes, with decisions made quickly so SMEs can focus on their day-to-day business operations and generating extra revenue.

Overdrafts for SMEs continue to be withdrawn or reduced by high street banks, restricting working capital for hundreds of thousands of British businesses. Now would be a sensible time to gain a better knowledge of alternative finance options so you can make better informed decisions and use funding more effectively.

Talk to your bank but prepare to be open-minded by comparing which providers are best placed to support your business at every stage of its life cycle with a range of tailored and flexible finance solutions.

For further information to discuss your business's requirements, contact the Wesleyan Bank team at commercialtax@wesleyan.co.uk or call 0800 980 9348.

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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