Recession grinds on for smaller firms

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MORE than a quarter of SME owner managers across Yorkshire and Humberside are sceptical that we’re truly out of recession, according to results of the latest Close Brothers Business Barometer.

The survey, which aims to gauge SME sentiment on a number of financial issues, also showed that 24 per cent of respondents feel that trading conditions for their business are worse than they were this time last year.

Lee Hayes, regional sales director for Close Brothers Invoice Finance in Yorkshire and Humberside, said: “It’s clear that many firms are finding it exceptionally tough to do business in the current economic climate.

“The Business Barometer demonstrates just how tough that environment is. As many as 26 per cent of local firms told us they have considered closing down within the last year.”

A further 10 per cent admitted that they have been unable to secure additional bank finance in the past six months.

Mr Hayes continued: “Despite the fact that funding is so hard to come by, we discovered that 60 per cent of SME owner managers in the North East are unfamiliar with invoice finance and only 10 per cent said they would consider using it to aid sustainable cash flow.

“We need to raise awareness of other viable funding options. There is definite potential for growth in the current climate, but to fully maximise any opportunities, companies will need to carefully consider their financial strategy.”

Mr Hayes argues that invoice finance is an important but often overlooked source of funding that can help firms realise their potential and manage cash flow.