Putting bad experiences behind you: How to recover from a financial blip

  • Sarah Greig
  • 11 Aug, 2017
Financial Blip

By Richard Waldman, Group Sales Director

It’s no secret that we’re in a period of economic uncertainty. Between a rise in business rates, inflation starting to kick in and a general malaise in consumer spending trends, British SMEs have many odds stacked against them.

It won’t come as a surprise then, that in January this year Begbies Traynor, a business recovery practice, reported that the number of small businesses in the country suffering, or heading towards, financial distress, has risen again.

But, it should be made clear that a blip in your finances is not a precursor to failure and is definitely nothing to be ashamed of. Business is never plain sailing, and what normal business doesn’t meet a few bumps in the road? As long as SMEs manage their road to recovery in the correct way, seeking help when needed to keep their head above the ground there’s every reason to believe they’ll come out stronger.

Now’s not the time to panic

Whether it’s a customer that’s not paid a big bill or you’ve fallen behind in payments to suppliers, there are a number of situations that can have a negative effect on an SME’s finances. After all, cash flow is the crucial to the prospects of any company.

But now is not the time to panic, and this is absolutely key because panicking can lead to bad decisions. Keeping calm and assessing the situation is imperative, to you can take the right next step. And, know that you are in good company when setting your sights on recovery.

For example, the owner of an electrical contracting business came to us when their main customer, who contributed to 80% of their turnover, hadn’t paid them for three months.  They had been a successful business for 7 years but this one bad experience put them in a volatile situation.

We were able to support this business by getting them the funding they desperately needed and were struggling to find. With a confidential invoice finance facility, our team helped them to manage their ledger and get the money necessary to flourish once more. Read the full case study here.

Seek a helping hand

It’s pretty obvious from that example that the seeking help is important in these sorts of situations. I think it’s vital that businesses don’t try to brave it alone. Not all SMEs have extensive finance departments or teams to guide them, so sometimes you need a helping hand to get you through a tricky time.

Finding the right funding partner to support you in your recovery is very important and can be a business’ saving grace during a bad financial experience. For example, a haulage business we helped required immediate funding to pay creditors and staff wages.  They’d fallen behind on VAT and PAYE payments meaning without a fast injection of funding from a lender, they were days away from going under.

With the support of a funding partner who understood their needs, this potentially disastrous situation was averted. With a little help from an invoice finance facility, the business was was back on track with happy creditors and employees’ jobs were saved.

Remember, financial blips are more common than you think and it’s nothing to be ashamed of. At Ashley Finance, we know firsthand that every business goes through its rough patches and that recovering from financial pressures can be eased with the right support. For SMEs, a positive attitude and a helping hand can solve a problem that once seemed impossible.