47% of small businesses lost out on up to £10,000 in the last year due to turning down work contracts and orders, according to a study.
Out of 501 companies surveyed by Hitachi Capital Invoice Finance, 26% rejected contracts worth up to £5,000 while 21% snubbed deals worth between £5,001 and £10,000.
Almost one in five (19%) turned away work because of unfair demands from customers, whereas only 8% rejected contracts due to lack of finance.
Out of those that turned down work due to lack of finance:
- 40% did not want to risk taking out a loan
- 28% approached traditional lenders but could not secure enough money
- 26% had their loan application rejected.
A further 34% invested personal funds into their businesses in the last 12 months.
Among start-ups, 50% invested their personal savings compared to 19% of established businesses.
Other reasons for businesses turning down work included a lack of awareness of invoice financing (13%) and alternative finances available (8%).
Firms dealing with unfair demands or late payments from customers could find invoice financing helpful.
There are two types available:
Factoring – providers purchase the amount owed by customers, making them responsible for collecting debt and carrying out credit checks.
Invoice discounting – you’ll receive a percentage of the value of your unpaid invoices but you are responsible for collecting payment.
Talk to us about securing finance. Contact Andy Oakes.