Using Debt Factoring to Survive the Economic Slump
Its now a blatant fact that the United Kingdom Economy is in a downturn and Company Directors interested in their Companies existence must have a plan or they will most certainly go into liquidation
The tricky trading conditions over the Christmas and New Years holiday season saw an exceptional level of shops go into insolvency
Retailers and Businesses that have already been bore the brunt of the recession and have had to go bankrupt are MFI the furniture retailer, Whittard of Chelsea, the specialist tea and coffee retailer. and Wedgewood the fine China and tableware manufacturer.
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.
How can a business survive this recession? Well Alan Tilley of the Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a viable business core, credible management team, a valid business plan and appropriate finance.
British Business is now facing a Cash Flow pinch caused by the credit crunch and and freeze in the capital markets forcing Companies to search out alternative sources of funding
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, distribution costs. The build up of a number of cost saving can be remarkable.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of funding such as invoice 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 factoring 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.
The tricky trading conditions over the Christmas and New Years holiday season saw an exceptional level of shops go into insolvency
Retailers and Businesses that have already been bore the brunt of the recession and have had to go bankrupt are MFI the furniture retailer, Whittard of Chelsea, the specialist tea and coffee retailer. and Wedgewood the fine China and tableware manufacturer.
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.
How can a business survive this recession? Well Alan Tilley of the Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a viable business core, credible management team, a valid business plan and appropriate finance.
British Business is now facing a Cash Flow pinch caused by the credit crunch and and freeze in the capital markets forcing Companies to search out alternative sources of funding
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, distribution costs. The build up of a number of cost saving can be remarkable.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of funding such as invoice 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 factoring 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 Debt Consolidation Loan at
11:48 AM
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