UK businesses are returning to work this month with some trepidation, finds fintech business lender MarketFinance.
Nine in ten businesses are waiting to be paid an average of £148,917 for work done pre-lockdown, half of those that applied for CBILS loans have been declined and cash flow will be strained as invoices take longer to be settled.
It’s little wonder that 85% of business owners have felt a sense of loss of control over the past 3 months.
With £148,917 still owed to them since March 2020, the vast majority of businesses (81%) are also expecting to wait longer to be paid for the goods they provide and work they do from now on.
Half anticipate waiting anywhere between 14-30 days beyond normal terms (45 days). Whilst 15% reported they could be waiting anywhere between 3-6 months longer to be paid for work.
Only 43% of businesses that applied for a CBILS loan were successful in securing it. The typical loan taken by these businesses was £211,667, though they applied for almost double this amount.
Anil Stocker, CEO at MarketFinance, comments: “The reopening of the UK’s high streets marked the first buoyant moment for UK businesses in months but it might well be the calm before the storm.
“Businesses are facing a three-pronged assault on their finances. First up, its alarming that only half of their CBILS loans are being granted, then we learn that they have close to £150k in outstanding payments since the lockdown began and now, it’s likely that they will have to wait twice as long to get paid for new work they do whilst demand and economic activity normalises.
“This coupled with a very moderate outlook for trading conditions, ‘rent quarter day’ this week and uncertainty about their workforce, no doubt this will put further pressure on businesses.”
Anil Stocker adds: “Given the continuing uncertainty around how the country returns to ‘business as usual’, I would urge business owners to look beyond their banks and seek advice as soon as from other lenders, business advisors and mentors. The earlier they do this, the wider the range of potential solutions they’ll have open to them.”