Bill Financing Experts Call for Greater Collaboration to Help SMBs Access Critical Cash Flow


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Some of the key invoice finance voices have called for greater collaboration and transparency to help pave the way for SMEs to access finance.

At a recent online panel, hosted and hosted by Optimum Finance, a selection of business owners and executives came together to explore how invoice finance can get businesses back on track in 2021.

Joining the debate were; Ant Persse, CEO of Optimum Finance, Philip King, Small Business Commissioner, Warren Ralls of British Business Bank (BBB), Josh Levy, CEO of Ultimate Finance, Evette Orams, CEO of Hilton-Baird, Steve Noble , Managing Director at Reward Capital, Martine Catton, CCO of Just Cashflow and James Hawksworth of RSM.

It was chaired by Glenn Blackman, Managing Partner of FundInvoice.

While government support measures, including the Coronavirus Business Interruption Loan Program (CBILS) and the Recovery Loan Program, have played a critical role in helping businesses get through the survival phase of the crisis. pandemic, some companies may need to consider alternative financing solutions.

Is the time right for non-traditional lenders to play a key role in providing vital financing to SMEs through asset-backed loans?

Ant Persse, CEO, Optimum Finance

“It can play a huge role,” said Ant Persse, CEO of Optimum Finance.

“The bottom line is that businesses don’t fail because they are in deficit, they fail because they lack cash.

“It is absolutely imperative that we support businesses with access to liquidity. The government, and with the support of BBB, has helped inject a significant amount of liquidity into the SME community over the past 12 months, and it has inevitably avoided several corporate bankruptcies, but the loans that have been taken out, they must be repaid.

“Businesses need to get back on their feet. They need to have access to cash. We know there are hundreds of billions of pounds currently trapped in unpaid bills at any given time. “

Persse pointed out that invoice financing increases with business growth.

“As we see businesses come out and recover, invoice financing can certainly help as we would be moving against increases as well,” he said.

James Hawksworth, SMR

James Hawksworth of RSM agreed.

“The nature of the finances of invoices means that they increase with income,” he said.

“There are a lot of viable businesses that will see huge opportunities for growth. Rishi Sunak said we’re going to have the strongest growth since WWII, so something will need to help manage that working capital and bill funding would be in a great position to do that.

Evette Orams, Managing Director of Hilton-Baird, recalled how invoice financing has helped UK SMEs in previous recessions, not only during but also after.

“It’s a brilliant tool to support businesses in expanding and receding economies,” she said.

Martine Catton, CCO of Just Cashflow, suggested that one of the main advantages of invoice financing over traditional banks was the ability to access flexible liquidity faster.

“It is difficult for a lender to judge the direction of a business, whereas with invoice financing, it is very clear because it is based on data, it is based on the value of the invoice.

“So if the business grows, the money is available, it goes up and down with the business.”

She continued, “This is probably the biggest time of any kind of recession where invoice financing is really going to make sense, because it’s based now on what companies are going to do in their trading, on their new forecast. , on their new orders and on their new contracts. This alone is the best product that can align with that. “

Josh Levy, CEO of Ultimate Finance, said it was time for invoice finance companies to start ‘making noise’ around the different products on offer, adding: ‘Now is the time for the industry to shine. The reality is that the benefits that were described at the beginning have been the benefits for as long as we can remember, and nothing has changed.

The Office for Budget Responsibility also predicted that up to 40% of government guaranteed loans could default.

The panel agreed that products from non-bank lenders can help reduce this number.

Ant Persse said that while the BBB and the government have stepped in to help businesses when they need it most, some businesses will inevitably fail, but there will also be “big businesses” that will simply need access to it. cash.

“As we emerge from this crisis, we will be in a strong position to support them,” he said.

Martine Catton said invoice financing should no longer be seen as an “alternative” option, but as a viable option for SMEs.

She said the industry should work more collaboratively with other lenders and traditional banks to understand business needs.

“We need to look at how we can make deals in different ways,” she explained.

“We have to start looking at what the future looks like. By looking at how we can finance businesses and what the requirements are, we can work together as a group to serve UK SMEs and I think we can do a very good job.

Evette Orams, Hilton Baird

Evette Orams observed that the terminology used in invoice financing made it difficult to understand the offer for SMEs and that financing should not be classified as “plan B”, but should be considered as a first option.

“It’s up to us, as a community, as an industry, to communicate our offer. We need to look inward, innovate, and paint a new picture that we can share with potential users on how we can help them shape their business and move forward.

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