Pictured: Martyn Freshwater
Invoice finance has been reaffirmed as a key form of finance for
SMEs wanting to capitalise on export opportunities, which the CBI
believes could give the UK economy a £20 billion lift.
This week Britain was urged to match the EU average of one in
four small to medium sized enterprises exporting by 2020 and aim to
increase net exports from minus 2.4 per cent in 2010 to 2.5 per
cent by 2016.
Lloyds TSB Commercial Finance, the asset based finance arm of
Lloyds Banking Group believes a key tool for SMEs wishing to export
is a complementary funding package, with director general of the
CBI, John Cridland agreeing that access to finance would be crucial
to reach the target.
Selling goods and services to Europe or further afield
inevitably leads to strain on cashflow due to extended delivery and
payment times and therefore access to scalable finance is essential
for SMEs wishing to increase or begin trading abroad.
Invoice finance, which advances the value of up to 90 per cent
of issued invoices, has been cited as ideal for SMEs wishing to
trade abroad.
Martyn Freshwater, regional director at Lloyds TSB Commercial
Finance in the Midlands, said: "Putting in place an export strategy
can be overwhelming for smaller businesses, as even simple factors
such as language barriers, varying time zones and changing currency
rates can cause a break down in communication which can lead to
late payments and cashflow problems.
"By leveraging the value of bills raised either in the UK or
abroad, businesses can use invoice finance to bridge the gap
between raising an invoice and receiving payment.
"It's important SMEs think seriously about how they can adapt
their offering for overseas markets, both established and growing.
It is looking likely that the UK economic recovery will be
export-led and companies wishing to be in the best possible
position for future growth need to take advantage of these
opportunities."
The most recent Business in Britain statistics from Lloyds TSB
revealed that out of the 1,800 plus businesses polled, 23 per cent
exported goods. 43 per cent of respondents said exports made up
just 1-10 per cent of total sales.