A sobering outlook

Having come out the other side of the pandemic, 2022 looked like a year for growth and business confidence was building.  The start of the year saw activity across the economy continue to expand, but economic headwinds were picking up and UK businesses were beginning to feel the impact.  

What a difference 6 months makes.

Headlines about the state of the economy are hard to ignore, with many businesses dealing with the sharp rise in costs and concerned about the effect this may have on both consumer and business confidence and subsequent demand.  UK businesses continue to face stormy seas and we are all reeling from the impact of both the economic and geo-political challenges in front of us.  We have not faced inflationary pressures the likes we are seeing today since the 1980’s and with pressure mounting on businesses across the UK, the Government under their new leader Rishi Sunak is facing an uphill battle to make a difference and quickly.

The outlook looks challenging, and we will need to wait and see how the health of UK businesses fare over the coming months.

After several years of challenges business resilience bears the battle scars.  Recent stats revealed that 60% of SMEs were cautious about the future, higher than in 2019 but lower than the 72% in Q1 2021 – only time will tell if this is to increase.  The Governments’ plan to cap energy prices for businesses for six months is some relief but perhaps doesn’t go far enough.  We will wait and see what additional support may be in the offing when the Chancellor releases his Autumn statement on 17 November although we expect the focus to be on more tax measures to reduce the level of borrowing.

Surveys also suggest that investment may be put on hold and who would blame business owners for rethinking investment plans, investment is needed if we are to continue to fight off the threatening recession.  One thing is perhaps certain, the recent surge in costs faced by many businesses – a consequence of strong global demand, supply chain blockages and exacerbated by the Ukrainian conflict – may also be prompting SMEs to review their finance needs to meet current working capital fluctuations. 

Access to funding is key

Funding is a vital resource for businesses.  Latest statistics revealed that the use of and demand for finance from UK businesses remained static in the first quarter of 2022.  Overall, lending has been broadly stable, but there has been a pick-up in new overdraft approvals and utilisation. In addition to this, there has been continued growth in invoice finance and asset-based lending advances which experienced a 10% increase over the previous quarter. With the onset of increased cost pressures businesses will need to ensure they have funding in place to support their plans moving forward. 

As funders we appreciate the difference an ongoing and flexible supply of cash can make to a business and as caution rises and confidence diminishes, businesses may be forgiven for once again taking a “batten down the hatches and sit it out” approach.  The most recent Small Business Monitor showed that in 2019, 45% of SMEs were using external finance, declining to 37% in 2020 and after increasing in 2021 to 44-45% has slipped once more to 37%.

It's encouraging to see Invoice Finance continue to be a viable and popular option for UK businesses.  Prior to the pandemic 40k businesses were benefiting from £21 billion of funding at any one time – equivalent to around £125 billion of finance per annum with the combined turnover of businesses over £275 billion.

Committed to supporting business

Our mission is to work with businesses who have untapped potential because they don’t have access to funding to make plans happen.  We are committed to being here for them and to be by their side giving them the confidence to grow with a flexible funding solution which matches the needs of their business.

Pulse Cashflow have been proud to continue supporting businesses over the last few years and we remain committed to supporting them as we battle through the next few.  

We work with a diverse range of businesses and at the heart of our funding decisions is the quality of the debt not the strength of their balance sheet.  So, unlike mainstream lenders who may shy away from a more challenging deal, Pulse Cashflow are open to discussing all opportunities.  Our flexible approach makes us stand out from the crowd.  We pride ourselves on our flexibility.  Whilst many funders talk about flexibility, we have earned a reputation for being flexible.  

We are committed to supporting a wide range of businesses, from trading new starts (projecting £350k turnover in year 1) through to businesses turning over up to £50m.  With funding facilities up to £5m we are helping more businesses today than ever.