Cost control and managing cashflow is a priority for UK SMEs but they may be failing to use finance to achieve their objectives, new research shows.
According to Hitachi Capital Business Finance, 39% of small businesses believe keeping fixed costs down needs to be a priority to drive growth in the coming months.
In addition, one-in-five say improving cashflow is a priority, while 17% say being stricter about being paid on time by clients is key.
Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: “Most of the growth initiatives mentioned by small businesses related to money – cutting costs, improving cash flow or being stricter with getting paid on time.
“Given this, it does come as something of a surprise that so few SMEs are actively shopping around for different funding options. The recent UK Government move to compel banks to refer consumers to lending platforms highlights this broader issue of choice.
“SMEs should be more aware of the alternatives open to them. For example, around seven in 10 small businesses are not aware of asset finance as a tailored and competitive finance option, which is clearly reflected by the very small number of businesses looking specifically to secure finance for a vital business asset.”
Hitachi Capital Business Finance is launching a number of education initiatives to help raise SME awareness on the range of funding products available.
The research findings are from the quarterly Business Barometer by Hitachi Capital Business Finance which tracks SME confidence across the UK, key regions and sectors.
The poll covered the attitudes of 1,213 SME decision-makers for the three-month period to the end of March 2017.
Hitachi Capital Business Finance provides business asset finance to more than 25,000 customers throughout the UK through brokers, vendors and online direct to SMEs. Services include hire purchase, operating lease, finance lease solutions and block discounting.
Top SME initiatives to achieve growth
|Keeping fixed costs down||37%|
|Improving cash flow||20%|
|Expanding into new markets/overseas||20%|
|Hiring more people||17%|
|Being stricter with getting paid on time (e.g. from clients)||17%|
|Investing in new equipment||14%|
|Reassessing finance commitments||8%|
|Streamlining supply chain||6%|
|Seeking financial funding via a partner/ company other than our bank||6%|
|Moving to a different location/ bigger office||5%|
|Securing financing to replace a vital business asset(s)||2%|
|None of these||31%|
Source: Hitachi Capital Business Finance