Nearly half (48%) of SME business owners have stated that cash flow is currently the biggest challenge that their company is facing, Millbrook Business Finance has found.
Research by the firm has also found that the cost of living crisis and energy prices are having an impact, with 32% and 30% of firms respectively highlighting these as their main issue.
Other issues that businesses are having to deal with include supply chain disruption (26%), inflation (24%), recruitment (20%), building overheads (15%) and unexpected tax bills (8%).
Millbrook also revealed that of the firms looking to take out finance in the next 12 months, two in five (40%) stated that it was to smooth out issues with cash flow.
A further 20% said that the finance would be used to purchase equipment and machinery.
Managing director at Millbrook Business Finance, Justin Amos, said: “It comes as no surprise that so many businesses are struggling with cash flow at the present time. Whenever the economy is weakened, late payments and supressed customer demand become much more commonplace, and this can dramatically worsen cash flow for SMEs.
“When you also factor in the ongoing cost of living crisis and painfully high energy costs then it’s no wonder businesses are facing significant financial challenges.”
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