Business for SMEs is crucial in the run-up to Christmas and the initial few weeks of the New Year according to one of the UK’s leading independent commercial finance companies. This is because it is the most common time for a majority of businesses to experience cash flow problems.

As many signatories (Company Directors) and finance staff take holidays during Christmas, businesses can suffer from cash flow problems. Sick days also increase at this time of year due to illness and unauthorised absence. In such situations SMEs must effectively consider invoice financing to eliminate such problems. Cash advances on the entire invoices enable them to cope with the challenges of lack of cash flow that occur during Christmas and the New Year.

A spokesperson from a leading commercial finance company has said that Christmas and the initial weeks of January are crucial for small businesses as many finance department staff, clerical assistants and Managing Directors go on leave during this period of the year. As a result of this, cheques are not signed, payments are not made and often small businesses face major cash flow problems at this time.

During the festive period, business owners might opt for expensive bank overdrafts or use the company credit card, both of which can worsen their weak cash flow positions in the interim. Therefore, opting for invoice financing at such times can be quite beneficial.