Skip to main content

Cash flow concerns causing sleepless nights for half of SMEs

  • 50% of firms admit to sleepless nights because of cash flow concerns   

  • Maintaining cash flow is a problem for 59% of businesses

  • 50% of firms’ cash flow fluctuates seasonally

Half of SMEs polled as part of Close Brothers Asset Finance’s latest research* have admitted to suffering sleepless nights caused by cash flow concerns; a further 59% said that maintaining cash flow consistently is a ‘problem’.

“In the 10 years plus we’ve been conducting our research, cash flow has consistently rated as firms’ primary concern,” said Neil Davies, CEO, Close Brothers Asset Finance. “This spans sectors, regions and size and is not a problem purely for smaller firms.

“Given these results, it should come as no surprise that business owners are struggling with the issue, particularly in light of the fact that three out of every five SMEs polled have said maintaining cash flow is a ‘problem’.”

Seasonality  

Cash flow fluctuates seasonally for 50% of businesses in the UK, with this being particularly acute in the West Midlands, where the figure rises to 65%.

“Many sectors are seasonal, from agriculture to holiday lets, which is why a cash flow forecast is an essential tool for business planning because it helps business owners to understand where cash is needed and where pinch points might happen,” said Neil.

“It allows business owners to understand how issues will impact cash flow and have visibility of when payments are likely to be received or will be required to be made.”

Problems caused by cash flow

Many business owners have had to make tough choices when cash flow issues have arisen, with deferring both bills and supplier payments topping the list. Some firms have been forced to delay paying wages while others have made redundancies.

Methodology

*All figures, unless otherwise stated, are from a Kanter Research survey conducted in January 2020. The survey canvassed the opinion of over 900 SME owners across the UK and Ireland and across several industries on a range of issues affecting their businesses.