Cashflow problems to worsen in next six months, say North West businesses

A large number of businesses operating in the North West are experiencing cashflow problems, according to the findings of a new study.

The latest Business in Britain report from Lloyds Bank found that one in five companies in the region are facing issues with their cashflow, with a further two-fifths expecting the problem to worsen over the next six months.

The report also highlighted that while more than a third (37%) of respondents were confident, 40% of North West companies think the number of customers in need of deferred payment terms will rise in the next six months. When the twice-yearly report was last published, that figure stood at 27%.

The MD of Lloyds Bank Global Transaction Banking, Donald Kerr, commented: “While the number of North West businesses suffering cashflow problems has fallen from a peak of 35% in 2013, it remains stubbornly high.

“Cashflow is the lifeblood of any business but for too many businesses, late payments continue to be a significant problem. Where businesses do expect cashflow to be an issue, they need to take action to manage issues like late payment so that it doesn’t hamper their opportunities to grow.

He continued: “Specialist types of lending such as invoice finance can alleviate these pressures by allowing businesses to borrow against the value of their invoices helping them to avoid payment delays and improve cashflow. Thorough credit checks on customers and setting out clear payment terms at the outset of any relationship will also help.”

The Business in Britain report examines the opinions of 1,500 UK companies, the majority of which are small and medium-sized enterprises.