Research by Hitachi Capital Business Finance showed that in September 2018, 1 in 10 small business owners feared their business will fail. This compares to 5% of business owners who feared financial collapse when asked during the three months from June to August 2018.
The highest proportion of business owners worried about their survival are from London or the North East.
Many businesses that trade overseas are concerned about the Brexit negotiations and how leaving the European Union will affect their business.
Businesses that are struggling are looking for ways to improve their finances. They are wanting to reduce fixed costs, improve cash flow and reduce the number of overdue invoices. Many businesses are looking beyond the large traditional banks for funding and turning to alternative lenders for bridging loans that can raise short-term cash to give the business time to restructure and increase income.
Gavin Wraith-Carter from Hitachi Capital Business Finance said:
“It’s clear from our latest research that small businesses are focusing heavily on the financial health of their business – whether this be improving cash flow, getting tougher on late payment or looking for better ways to secure finance.
“The key thing is that they shouldn’t leave it too late. With a weak pound and interest rates on the rise, small businesses are entering a challenging era.”
Bridging finance lenders can help companies stay afloat and rebuild if they have sound plans to improve the profitability of their business, and a clear strategy for repaying the loans.