Are You Sitting On A Growth Opportunity?

“You miss 100% of the shots you don’t take,” said NHL hockey legend Wayne Gretzky.

And according to a recent report from Lloyds Bank Commercial Banking, many Small and Medium-sized Enterprises are missing out on a significant opportunity to grow simply because they’re not aware of it.

What’s the opportunity?

2 words: invoice finance.

Consider these quick facts:

• British Small and Medium-sized Enterprises own £770 billion in assets
• This is the equivalent of 48% of the UK’s Gross Domestic Product
• British SMEs are owed £291 billion in outstanding invoices

This £291 billion in outstanding invoices could clearly be used by SMEs to help them grow. In fact, invoice financing would enable many SMEs to obtain up to 90% of the outstanding invoice within as short a period of 24 hours. But according to Donald Kerr, Managing Director of Lloyds Bank Commercial Finance, there is a significant gap between the SME’s desire to grow, and the SME’s willingness to utilize invoice finance to facilitate this growth.

Said Kerr:

“Our research found that more than half (52 per cent) of SMEs are more confident about investing in growth this year than they were 12 months ago. Despite this, SMEs are missing out on the opportunity to recruit new staff, break into new markets or develop new products because they are not harnessing the full range of funding options available that could unlock the value in their assets or invoices to help them grow.

“As a result, businesses are turning down contracts that they think they cannot afford to fund and are holding back their own growth potential.”

Analysing the Lloyds report, the following statistics immediately jump out:

• 49% of SMEs are aware of the invoice finance for driving growth
• 36% are aware of asset-based lending
• 24% of SMEs have used an overdraft in the last 12 months
• 9% of businesses have used invoice financing in the last 12 months
• 32% of SMEs have taken out a loan

The gaps between awareness and usage imply that many businesses are not completely aware of all the finance products available to them. And the tragedy of this is reflected in the 38% of businesses who would hire more staff, the 31% who would break into new markets, and the 27% who would develop new products if they had access to more funds.

Invoice financing is a way to give businesses access to these funds whilst taking away the uncertainty and stress of trying to recover outstanding invoices.

Invoice finance is an invaluable way of also allowing SMEs to do business with great confidence, knowing that they are guaranteed to receive a significant percentage of each issued invoice, if not the full amount.

If you want to discuss invoice financing for your business, get in touch today.