The road to recovery - a key educational role for financial intermediaries
While business growth indices show improvement, there is a long way to go to achieving full recovery and reversing the downward trend in business confidence, and financial introducers have a significant role to play, says Andrew Bullard, head of business at leading invoice finance broker Cashflow UK.
The GDP figures for the first quarter of the year reveal an increase of 0.5 per cent, allaying fears of a double dip recession as the UK economy recovers from the contraction in the final quarter of 2010. Furthermore, the Purchasing Managers Index - the latest index of activity in the UK services sector, which accounts for three quarters of national output - has revealed that March 2011 produced the fastest growth for more than a year. It appears that this boost in output has had the knock-on effect of slowing the decline in UK business confidence, as highlighted in the latest ICAEW/Grant Thornton UK Business Confidence Monitor. It seems that business confidence is gradually returning to levels typically seen before the financial crisis.
These factors give us significant optimism that we may at last be on the road to recovery and business prospects may be returning to some degree of normality. Yet, we mustn’t get carried away. It is important to recognise the only way growth can be sustained is for businesses to be supported by flexible and accessible forms of finance that enable them to improve stability and secure future opportunities. Financial intermediaries can play a key role in ensuring their clients know what funding options are open to them.
With traditional finance sectors in poor shape to deliver funding for business, especially to small and medium-sized enterprises, there is an even greater need and opportunity for other forms of funding to fill the void. Invoice finance facilities such as factoring and invoice discounting are increasingly being used, as businesses are able to access working capital by releasing funds tied up in invoices as soon as they are issued.
The opportunity for finance introducers to play their part in the economic recovery is significant. In Q1 2011, Cashflow UK saw an increase of 25% in enquiries and leads, showing that businesses are not putting growth plans on hold and are unfazed by the banks’ reluctance to meet their requirements.
Many businesses are also choosing to take advantage of the additional support they can access through invoice finance providers, including protection from bad debt and professional credit control services and, in the case of international businesses, multi-lingual expertise, providing peace of mind and a lifting of administrative burden.
However, while large numbers are now switched on to the benefits of alternative funding, many more are not and awareness of options such as invoice finance need to be improved. With the UK striving to reduce its budget deficit and live up to the economic policy of strong, sustainable and balanced growth, one thing is clear - the role of financial introducers as educators and facilitators for clients has never been more important.
Cashflow UK is a leading finance brokerage specialising in factoring and invoice discounting and its specialist team of financial experts are able to offer impartial advice and find your client the best provider to match their needs. In addition, you could benefit from Cashflow UK's reward commission for successful introductions, which is on-going for the life of the client, thereby giving you an additional income stream.
