Debt is an issue for 31% of South East manufacturing firms

Business Link finds out where manufacturing firms* are finding credit to cope with cash flow squeeze

Firms in the South East are finding their cash flow is affected by shorter terms from suppliers, late payment from customers or both, according to a new Report published by Business Link.  Credit and Cash flow in the Recession, found that across industries there is a marked difference, 61% of construction firms reported a change in payment terms compared with 35% of those from the retail, tourism or other sector and 46% average across the South East. 

Manufacturing firms in the South East are seeing more customers paying late (51%), clients extending their payment timeframes (44%) and reduced supplier payment timeframes (26%).

Banks and lenders are also changing their conditions.  Of those manufacturing firms that sought new finance, renewal or extension of credit terms, 27% experienced difficulties in doing so.

20% of manufacturing firms reported that lack of finance was the main reason their firm wasn’t growing faster.

Richard Holmes, Business Link Regional Finance Manager, comments:

“Businesses have been squeezed financially, with suppliers wanting earlier payments, clients taking longer to pay and the threat of bad debts a strong possibility in most sectors.  All of this at a time when traditional bank finance is in short supply.  New Government initiatives, such as the Enterprise Finance Guarantee, are gaining momentum but demand is still greater than supply.  Business Link in the South East offers 1-2-1 advice to firms of any size on finance and can  help them to devise a realistic funding strategy.”

Business Link provides information, advice and referrals to sources of funding, other business support, and professional services such as accountants.  To find out how they can help you, or to book a free business review ‘Health Check’, call Business Link on 0845 600 9 006, or go to www.businesslink.gov.uk/southeast.

*small and medium sized manufacturing firms (under 250 employees) in the South East, surveyed by Business Link