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Alternative funding still available for SMEs

Nia Williams

November 13, 2012

The move follows recent industry reports regarding the challenging state of business funding.

Recent forecasts from The Ernst & Young Item Club suggest that bank lending to businesses is at its lowest level since 2006, and a survey from the Office for National Statistics, Warwick Business School and the Federation of Small Businesses report that average loan rejection rates have increased from 11% between 2005 and 2008 to 38% in 2012.

While overdrafts offer access to working capital for the lucky few, Malcolm Piper, director of Tandem Invoice Finance is keen to assure SME directors across the UK that alternative finance options are available and the number of schemes being accessed is continuing to rise.

The total number of businesses using asset-based finance, such as invoice financing for instance, has risen by 4% in 2012, pushing numbers up towards 43,000, according to the Asset Based Finance Association.

Selective Invoice Finance, offered by Tandem, provides a flexible option for SMEs by offering finance against individual invoices on an ‘as needed’ basis. By choosing individual invoices rather than a traditional ‘whole of book approach’, Tandem believes SMEs can better manage their cashflow, do not have to surrender their entire debtor book, only pay for the facilities that they use, and avoid the requirement for all of their clients to be ‘credit managed’ in the same standard way.

Malcolm explained: “Although the recent forecasts and surveys are rather bleak, there is still a range of funding options available to SMEs today.

“Many businesses are adopting invoice finance to access working capital and our Selective Invoice Finance allows UK-based businesses to release cash from single invoices, with no long term contract and a single transparent fixed fee. It is an excellent solution for those businesses needing flexibility and wishing to stay in control of their own cash flow.”


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