SMEs to struggle with cash flow in 2016

Written by companyrescuelondonadmin 3 April 2017

April, July and October are expected to be tough months for companies, according to a report by Hitachi Capital Finance. 

Analysed data from its customer database reveals SMEs are concerned about the oncoming increase to the National Living Wage in April. Together with compliance costs and altered pension systems, this is likely to put a strain on finances.

There may also be recruitment issues once the new immigration laws come into force. From April, employees earning less that £35,000 won’t be able to live in the UK for more than five years. 

With the holiday season from July onwards, the workforce will decline and business strategies may be put to the side.

Then, by October, preparations for Black Friday and the festive period will be well under way making businesses work full steam ahead to meet demand in time. 

All of these factors could put pressure on cash flow, especially if bank overdraft facilities are poor. 

Be aware of issues ahead and plan finances for the challenging months. It may be worth looking into alternative finance as a short-term solution to bridge the gap.