A majority of businesses in the UK are made up of small and medium scale enterprises, which provide a substantial boost for the British economy. That many of them struggle to find adequate financial support when they find themselves in a bind is regrettable.
The latest results of research done by Aldermore reveal that SMEs find it hard accessing satisfactory funding during recessions and funding to sustain meaningful growth. In this context, some quarters doubt what SMEs can do for the growth of local economies.
Fortunately, there are moves to address the lack of funding for SMEs. Just recently Oxygen Finance re-introduced its Early Payment Programme, a scheme which provides hefty cash rebates for supplies purchased by SMEs in exchange for prompt payment. So far the program has allowed the speedy transfer of funds to SMEs from local authorities. This program is projected to free-up about £1.5 billion for SMEs use over the next five years.
Oxygen Finance is, at this moment, working in partnership with Oldham Council on a pilot project that can potentially generate £2 million from £73 million investment fund. The partners intend to sustain the program as long as there is need for it. The process is believed to provide the key for unlocking funds for SMEs nationwide. To do achieve this, the process shortened bureaucratic procedures on payments of council invoices and reduced the levy that could go as high as £70 charged by the council per transaction.
Roberto Moretti, Oxygen’s Chief Executive for Europe, explained that liquidity is the life SMEs and it’s unfortunate that businesses spend around two weeks annually chasing payments, in the process wasting approximately £680 million. The Chief Executive believes there is a more efficient method of paying and called on local authorities to upgrade their system, which can help them benefit from their investments.