A MAJOR £100m invoice finance fund has been launched by Yorkshire Bank to help small businesses cope as bill payment times lengthen in the tough economic climate.
It follows Yorkshire Bank research which shows that small enterprises across the region face an average seven-week wait for monthly invoices to be paid – a delay which, in some cases, is threatening their survival.
Yorkshire Bank, which assists thousands of SMEs throughout the region, has ring-fenced the £100m cash flow finance package from its £1bn Business Expansion Fund launched last autumn.
The £100m fund is now available to both new and existing Yorkshire Bank customers through its confidential invoice discounting service.
Yorkshire Bank head of invoice finance, Martin Rothera, said the £100m fund would provide “real support for many businesses which face difficulties through no fault of their own”.
He said: “Late payments can put immense pressure on small businesses as cash flow dries up, leading to pressure on their ability to pay their own bills.
“Providing an invoice finance service which suits new and existing customers is a key part of our support for Yorkshire businesses, particularly those which are working harder than ever to compete in some very challenging economic conditions.
“From our research, we know that cash flow and invoices being paid on time are still a primary concerns for SMEs. Cash flow is the lifeblood of a business and invoice finance is an extremely useful tool for SME owners. It’s something which more businesses could benefit from accessing.”
Invoice finance allows businesses to access up to 85% of an invoice’s value as soon as it is issued, rather than waiting for it to be settled.
Yorkshire Bank says that in the last year, it has seen many businesses seeking to strengthen their own invoicing and credit control procedures using invoice finance and credit protection products.
Many small businesses were concerned about the threat of late payments – with one in 10 saying they would be forced to drastically restructure their business or close if customers took 90 days to pay invoices.