Why cash-flow is king when it comes to business survival.

With many national businesses making headlines recently with a variety of financial troubles, is our economy really in the positive position the government leads us to believe? The large companies in question have seemingly fallen on hard times due to their commitment to large retail premises, but what about the SME market place? In the regional press there are also reports of financial difficulties for smaller companies for different reasons.

Whatever the troubles facing businesses at the current time, are there ways to prepare in order to weather potential financial storms ahead? Howard Worth’s Head of Corporate Finance, Christian Goulding explains more.

“What I see more and more at the moment is companies under-estimating the importance of working capital in their business. Without this, a small delay in payment can have a large impact on a business meeting its financial obligations each month. By fully understanding our clients businesses we have been able to offer them practical solutions to increase the amount of working capital they have within their companies”.

Howard Worth’s corporate finance team has been able to help a client refinance some of its older equipment in order to raise money to improve cash flow at a peak trading period. The company was struggling for cash to pay a VAT bill and other invoices at the same time. The management team at the business was not convinced that any significant funds could be generated by financing older equipment, but they were delighted when they were introduced to the right lender to provide the cash they needed.

Sometimes the solution to fundraising can be as simple as producing a set of forecasts. Through the corporate finance team’s work, a technology and engineering business was able to secure a working capital loan to ensure it could trade through a significant upturn in work on its order book.

Both these case studies highlight how, through unforeseen circumstances, businesses can find themselves struggling to trade on a day to day basis. The outcome for both of these companies was positive and with the specialist support and advice, the corporate finance team at Howard Worth were able assist them in securing the funding they needed.

If you have any concerns regarding your business’ cash flow and would like to discuss your options please contact the Corporate Finance Team on 01606 369000 to arrange a confidential, no obligation meeting.