FEWER businesses experienced difficulties with their cashflow in the second half of 2014, despite overall business confidence fallingh in the face of concerns about the global recovery.
The latest Business in Britain report from Lloyds Bank found that, in a survey of 1,500 small and medium-sized businesses, fewer than one in five businesses reported facing difficulties with cashflow, down from one in four a year ago.
Donald Kerr, managing director of Lloyds Bank Global Transaction Banking, which provides alternative sources of financing for customers including asset based lending and trade finance, said: “Cashflow ought to be the most important focus for any business, so the fact that relatively few have got concerns in this area is very positive.
“As the economy recovers, one of the biggest risks to businesses – especially smaller businesses – is the threat of overtrading. This is where busineses take on more work than they can afford to deliver, creating a cashflow crunch.
“The fact that this does not appear to be happening, and that the number of businesses with cashflow worries has in fact stabilised over the past 12 months is also encouraging, especially amid concerns about global growth and weakening business confidence.”
Cashflow is less of a problem in Scotland, where only 8% of businesses said they were currently experiencing problems, followed the Cumbria and the North East. Businesses in Gloucestershire, Oxfordshire and the South Midlands (23%) were most likely to be experiencing difficulties with cashflow.