Surge in Start-Ups shines beacon of hope for UK economy
With recent statistics* revealing a record number of businesses started up in the UK in the first half of 2010, it is evident that British entrepreneurial spirit is still very much alive and kicking.
A total of 204,361 new firms had been established by June this year, which is 51 per cent more than in the first six months of 2008 when the UK first went into recession, and the highest amount in more than a decade. This figure shows that start-ups are indeed lighting up the UK economy and spreading optimism among both the small business and financial communities, as Andrew Bullard, head of business at leading invoice finance broker Cashflow UK, explains:
“The recession came as a huge blow to the UK economy causing a detrimental knock-on effect which left many small businesses financially crippled or even facing insolvency. Therefore, as we continue to emerge from the downturn, this encouraging number of start-ups comes as welcome news to financiers who have been poised and waiting for green shoots of recovery to take root.
“There is no doubt that small businesses are the engine room of this country’s economy and the fact that so many people are now using their own initiative to set up their business and help kick-start the economy again goes to show that sometimes, hard times can be turned into an opportunity. Indeed, the recession has created a new breed of entrepreneurs who are setting up companies based on past learnings which are enabling them to adapt to the realities of the new economy and pave their own way for success.
“What is important now is that these budding firms feel fully supported and in a position to seize new opportunities and grow. We all know that cash flow and survival go hand in hand, particularly within the crucial first year. It is vital that new start-ups ensure they have sufficient cash flow plans to help get their business off the ground, and enable it to flourish. Financial intermediaries undoubtedly play an essential role in making this happen.
“While access to finance remains a key challenge to businesses looking to raise capital, the level of understanding regarding the funding options available to them is also a key concern. It is therefore crucial that firms are aware of all their options and are guided by financial advisers in making the right choice and finding the solution which best suits their needs.
“In reality, there is a whole range of funding opportunities from independent providers, which are very much open for business. Invoice finance, for example, can provide a long-term viable solution to help businesses improve cash flow by releasing cash tied up in outstanding invoices. This enables them to meet those vital creditor payments such as taxes, not to mention the more obvious supplier payments and of course to have sufficient funds to foot the wage bill. The beauty of this form of funding is that it can grow in line with business growth and perhaps equally as important invoice finance can release business owners from the task of chasing invoices. Time which is better utilised driving the business forward.
“Whatever the financial decision, there are promising signs of growth in our economy and the financial market has never been more eager to help.”
Cashflow UK are the country’s leading finance brokerage specialising in factoring and invoice discounting and their specialist team of financial experts are able to offer impartial advice and find your client the best provider.
* Research conducted by business support group Yoodoo, which analysed Companies House data, October 2010
