Government awards £2m to boost productivity and tackle late payments

The Government has recently awarded £2m to help fund projects that are designed to boost productivity and solve the issue of late payments, as a negative culture that has started to grow in businesses across the country. This is typically due to a lack of simple financial tools that can help a company manage invoices, payments and their budget.

The funding comes from the £9m Business Basics programme which has been operational since 2018. As of now, there are 26 active projects that have been backed to develop ideas that encourage SMEs to use different types of technology to help manage their business. Many of these ideas are focused on efficient financial management to cut down on time spent doing administrative tasks while also optimising them and reducing the frequency of errors.

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There are currently 12 winners that have received funding to look into new opportunities that include gaming, coaching technique and online networking to boost business productivity and reduce the frequency of late payments in businesses across the country.

Kelly Tolhurst, Minister of Small Business said: “As a former small business owner, I know how important it is to harness technology to make your business more productive. This is why we’re awarding another £2m from our Business Basics Fund and backing 12 more exciting new projects to develop their innovative ideas.”

The Effect of Late Payments

Late payments continue to impact small SMEs across the country due to the knock-on effects that they create. One of the most troubling effects of late payments is in cash flow issues. As many businesses rely on cash flow in order to function and also expand, a break in their income can result in a number of troubling issues that slow the business down. It also forces the business to make difficult decisions regarding staff and investment opportunities, but could also impact the faith that investors and customers have on the business.

Cash flow issues can stem from a number of causes such as poor budget management, overspending capital, failing to chase clients that pay late or refusing to set strict penalties for breaking contract terms that could impact your business’s income.

Tackling Cash Flow Issues

When a business fails to keep up with paying the bills and other expenses, it means they have a cash flow problem that can be difficult to break out of. Unless some serious changes are made within the business, it’s often impossible to fully break out of the cycle. This is where outside help, such as cash flow loans, can help you stabilise your business.

Cash flow loans can help bridge finance gaps to ensure that your business can remain productive. With proper financial backing, you’ll be able to introduce changes to your business and improve your general productivity so that you can grow your company and solve any longer-term cash flow issues. Keeping your cash flow healthy can be a challenge especially if the business is facing difficulties, hence why a helping hand in the form of a cash flow loan can be a helpful way to solve ongoing financial concerns and attract new investors.

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What are the benefits of a business loan?

There are various benefits to taking out a specialist business loan. For example:

  • Business loan products allow the business to meet its objective – whether to prevent a cost-related issue or to invest in growth and opportunity for long-term success.
  • Loan interest is often tax-deductible as a business expense
    Business loans inject liquidity into the business – which is extremely useful during times of seasonal fluctuation or when the business is going through a period of change.
  • Business loans do not give away portions of the business to an investor – as with investor finance. The business owners retain full control.
  • Business loan products often have attractive interest rates and flexible repayment periods to help the business.
  • Business finance products are provided by experienced lenders that can assess the client’s business and make recommendations on their financial needs according to their circumstances.

Which industries need business loans?

The answer is – all sectors do! Different industries, of course, need a loan for different reasons but some examples are:

Cash flow

Working capital

One-off business expense

Finance a new project or contract

Take on new staff

Pay a VAT or corporation tax bill

Open another site or office

Refurbishment of trading premises

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Whatever your business need, the right kind of flexible finance is available to you. We’ll carry out a needs assessment based on your requirements and circumstances and advise on the loan products we can offer you. Our team are experienced, helpful, friendly- and they don’t speak in jargon!

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