Navigating difficult financial terrain, surviving stormy cash flow and satisfying a growing appetite for resources are just some of the threats facing SME owners that would test even Bear Grylls’ survival skills.

Asset finance can be a life-saver for business owners, helping to manage costs and cash flow and achieve their growth potential.

The following top tips will help to increase the ability of your business to survive any financial challenge.


1. Cash-flow is crucial

You don’t want your cash flow to slow to a trickle so be sure to issue invoices promptly and chase up any debtors. Be careful with stock management by negotiating longer credit terms with suppliers and shorter ones for customers. Also remember to stay on good terms with your bank and work to plug any gaps in your forward order book.

Being tough with late paying customers by imposing late payment charges will help to encourage prompt payment and cover costs incurred. By law, you can apply late payment charges eight per cent above the Bank of England base rate on unpaid bills.


2. Be ruthless with costs

Think about where you can make savings across the business. Monitoring energy consumption, for instance, can save you money. Business travel can be another drain on profits, therefore be sure only to make essential business journeys and always speak to your accountant to make sure that you’re taking full advantage of all available tax allowances.


3. Be vigilant with new customers

Credit checks on new customers are vital as it takes only one major customer collapse to jeopardise your business. Protect yourself by agreeing clear credit terms up front and conducting rigorous credit checks on new customers.

It may also be worth using credit reference agencies to provide extra protection against bad debtors, but do bear in mind the costs of using these services.


4. Retain existing customers

Customers need to feel valued and loyalty schemes, discounts and newsletters remind them that their custom is appreciated. In uncertain financial times, consumers cut their spending, so do all you can to attract a steady flow of new ones. Raising the profile of your business in the local community and corporate social responsibility initiatives are other useful ways to help to differentiate you from the competition.


5. Structure funding

Ensuring funding is structured to cope with the inevitable strain that operating costs place on cash flow is a positive move. Financial flexibility during times of tight margins and rising operating costs increases operational resilience.

Asset finance, particularly leasing and hire purchase, are growing in popularity with SMEs, not least because the success rate on application is the highest of all the major finance options.

Specialist providers, like Praetura Asset Finance, can be invaluable in offering the best advice and affordable plans with flexibility aligned to your commercial goals. Working with us can also mean immediate access to funds, which can go a long way to taking the strain off SMEs struggling with the challenges of the economic landscape.


For more information, and to learn how Praetura Asset Finance could help you, call us today on 0333 323 7800.