Press Releases

22 April 2003

"IN TODAY'S ENVIRONMENT, INVOICE FINANCE MAY BE JUST WHAT YOUR BUSINESS NEEDS...."

Gerry Hoare, Regional Managing Director - Southern Region

One of the most important aspects of any business is adapting to the economic environment – whether growth and boom or recession and gloom!

With a myriad of factors currently impacting on the UK economy, not least a volatile stock market, it can be difficult to predict the path of best opportunity.

Consumer expenditure is the biggest driver of economic activity in the UK, accounting for two thirds of the total. Fuelled by low interest rates, low unemployment, a buoyant housing market and high consumer borrowing, consumer spending has recently prevented overall growth levels from falling to very subdued levels. With incomes growing more slowly and higher national insurance contributions being taken from wage packets in 2003, sustained growth may be problematic, notwithstanding the recent and anticipated cut in interest rates.

Meanwhile, manufacturing and those sectors relying on external trade have had a particularly rough time. Poor consumer confidence within the leading global markets, due to threats of war and possible terrorism, has had a huge impact on world trade. Coupled with a poor dollar performance against the euro and sterling in recent months, many UK companies have had to face and overcome serious challenges.

So, how will all this affect your business and how should you react?

Both lower interest rates and strong consumer spending can offer favourable cost benefits and sustained demand respectively within particular industries. . However, avoiding falling into a false sense of security is important, especially where there is strong evidence that particular sectors are experiencing a downturn in demand and growth, such as the well publicised manufacturing industry, mid market printing, mobile telephony, electronics and sluggish secondary markets.

With this trend apparent, managing your cost base, rigorously planning your revenue generation and having a robust cash flow plan for the future are critical. Not only will you need to finance your working capital needs, but also the implementation of your business strategy going forward, be it restructuring to adapt to economic conditions, expansion, merger or acquisition.

With volatile public markets and possible retraction of traditional lending by the Banks, invoice finance provides a funding mechanism that ‘tracks’ your sales performance, providing sufficient working capital to fund your business in times of gloom, and also feeding cash into your business cycle when sales begin to pick up. With no requirement to apply for extended facilities, or renegotiate funding lines, invoice finance provides additional cash flow in a timely fashion, allowing you to avail of opportunities as they arise.

In the current environment, invoice finance may be just what your business needs – contact us today to find out how Enterprise Finance Europe can help your business or clients. Click HERE.

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