SELF- HELP IS SAFEST BET FOR SMALL BUSINESS...

SELF- HELP IS SAFEST BET FOR SMALL BUSINESS FINANCIAL HEALTH For thousands of businesses relying on changes made in this year's Budget to encourage and reward enterprise in Britain, the news from Gordon Brown was at best mixed. National Insurance increases will affect small businesses and few firms will qualify for the much hyped corporation tax reduction. At a time when only 10% of businesses say they are satisfied with Government funded business assistance services such as grant and loan funding for businesses 1), Alliance & Leicester Invoice Finance asserts that there are self-help measures businesses can embrace to keep their company in good financial health. One of the biggest concerns to businesses today is late payment. In a recent study of business sentiment, Alliance & Leicester Business Banking found that 20% of businesses rated late payment as their greatest concern. Debt collection times are generally poor across most industries, and business owners are wasting time and resources ensuring invoices are paid. Specifically: · Businesses with a turnover greater than £1 million wait an average of 12.3 days past the due by date whilst, on average, businesses with a turnover less than £1 million wait around 19 days extra for outstanding debts to be paid 2). · The manufacturing sector is particularly vulnerable to late payment with an average payment time of 20 days 3) past the due date - a long time in the eyes of a growing or new business. While Government initiatives such as the Better Payment Practice Group do go some way to rescue businesses from this problem, there are also ways businesses can help themselves improve the health of their business without having to rely on such initiatives. One much overlooked method of dealing with the issue of late payment is factoring. Factoring enables businesses to offload their entire credit management function to a third party. Businesses are advanced up to 90% of the value of their invoices, usually within 24 hours. Businesses then receive the remainder of the invoice value when the factoring company recoups the full value. Costs vary according to the value of invoices and number of suppliers. However, the removal of the associated costs of a credit management function will save businesses time and money. Alliance & Leicester Invoice Finance is a relatively new entrant to the factoring market offering: · Up to 90% of the invoice value to customers within 24 hours; · A comprehensive and personalised service to businesses of any size with any number of suppliers; · Weekly or monthly billing options. Gareth Williams, Head of Marketing for Alliance & Leicester Business Banking, said: "Alliance & Leicester Invoice Finance is keen to ensure that businesses are managing their cash flow to enable them to prosper and grow. Whilst overdraft facilities are usually fixed, the cash flow generated by a factoring arrangement automatically grows as the business grows. Factoring eases the burden for businesses by taking away the worry of chasing outstanding debts and it also takes the strain off supplier relationships. Factoring is one of a wide range of solutions we are offering to the business community in an attempt to break the big banks' monopoly of this sector." -ENDS- For more information or to arrange interviews contact Rebecca Ellis-Owen Financial Dynamics 0207 269 7112 Guy Bellamy Financial Dynamics 0207 269 7177 Alliance & Leicester Press Office 0116 200 3355 Note to editors: 1. The research for Alliance & Leicester Business Banking was conducted by NOP among 500 small business owners (turnover up to £1m) in England and Wales by telephone during 11- 21 March. 2. Alliance & Leicester Invoice Finance is a member of the Factors & Discounters Association. 3. Alliance & Leicester Invoice Finance offers factoring to businesses of all sizes and with any number of suppliers. It advances up to 90% of the invoice value within 24 hours. 4. Alliance & Leicester Invoice Finance offers weekly or monthly billing. 5. For further information on the range of product and services available from Alliance & Leicester Business Banking, contact 0800 587 0800 or go online at www.alliance-leicesterbusinessbanking.co.uk _______________________________ 1) Federation of Small Businesses Barriers to Growth Report 2) Credit Management Research Centre - November 2001 report 3) Credit Management Research Centre ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/05/07/20020507BIT01520/wkr0001.doc http://www.waymaker.net/bitonline/2002/05/07/20020507BIT01520/wkr0002.pdf