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Ultimate Business Cashwill “Show SMEs themoney!”

September 2, 2013 Business Loans

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With 99.9% of businesses in the UK being classed as a Small to Medium Sized Enterprise(SME), contributing almost 60% to private sector employment and 49% of private sectorturnover the fact that they are considered the lifeblood of the economy is anunderstatement. Yet many of these businesses suffer from late payments, with recentresearch from Bacs Payments Ltd suggesting that the average SME has to wait up to 8weeks beyond due date to see any money. The total late payment debt is said to be at over£30.2bn with an overdue debt owed to businesses of £31,000.

The research also suggests that more than half of the UKs SMEs are dictated terms bylarger businesses with 44% reporting that larger businesses are the greatest offenderswith regards to paying late. This is particularly concerning when we consider that aprimary reason for business failure is due to cash flow which can be driven by latepayment.

So what options are available to businesses to protect businesses from falling into cashflow difficulties?

Businesses can attempt to seek finance from traditional sources such as business loans oroverdrafts from banks. However, overdrafts, which has historically been considered as akey method of short term finance has seen a reduction in their demand by 12% to 14%between June 2012 to Feb 2013 according to research from The Department for Business

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Innovation & Skills. 32% of SME businesses that sought finance in the 6 months to Feb2013 could not get the finance they required, 3% more than in June 2012. 8% still did notknow whether their applications were successful which suggests that the speed for gettinga decision is not as swift as many businesses would like.

What is clear is that small businesses don’t have the luxury of their larger counterparts ofturning to syndicated financial opportunities or the capital markets for funding. Inaddition these businesses who need cash from business loans will find it both costly andor extremely difficult to obtain. Banks will often seek significant levels of data in anattempt to fully understand a business’s current financial profile and to understand theirfuture strategy in order to gain sufficient comfort to approve a business loan or overdraft. This underwriting process can potentially take weeks if not months, which for many SMEbusinesses is too long noting the pressures many will face with late payment.

Businesses can always seek to get their money in quicker from their debtors, or speedingup stock-turn. However, with their debtors likely to be suffering the same pressures oflack of available or higher cost.

However, alternative methods of funding can be sought, for example short term businessloans that seek to offer sums based on a preset algorithm, which seeks to identify abusiness’s credit risk profile and ability to pay a loan. Ultimate Business Cash is a newproduct that can offer businesses the ability to obtain a short term business loan up to thevalue of £35,000 which can relieve the potential cash flow pressure that many businessesface. A major comforter of using Ultimate Business Cash is that it is part of a seasonedSME B2B provider of finance, Ultimate Finance Group Plc. As a business that hassuccessfully serviced the needs of the SME business environment for 11 years weunderstand the requirements of the SME business community and are ready to helpwhere we can by responsibly offering swift, affordable and simple funds to SMEbusinesses that need our support.

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