BuildUK, the UK’s leading representative for the construction industry, has noted an increase in the number of businesses that are benefitting from improved invoice repayment terms in recent years. In construction – one of the sectors most affected by invoice issues – this development is huge. Average times to repay invoices dropped from 45 to 32 days between 2017 and 2023, while the percentage of invoices paid within 60 days climbed from 82% to 94%. “Businesses in the manufacturing sector should try adopting similar practices,” says Wilkie. “Renegotiating your existing invoice practices in favour of shorter repayment terms could lead to a wide range of benefits.” Accessing support The recent release of the Spring Budget seems to offer further protection for SMEs, with Conservative politicians heralding 2024 as “The Year of the SME.” The Recovery Loan Scheme, intended to help SMEs get access to finance, has been extended and rebranded as the Growth Guarantee Scheme. The scheme offers a 70% government guarantee on SME loans up to £2m in Great Britain. The same guarantee is offered to SME loans up to £1m in Northern Ireland. While this could be a big help, Wilkie encourages manufacturers to research a range of funding sources if looking for external support. “You may be able to access more favourable lending terms from alternative lenders, so don’t feel bound to big banking institutions. You can typically trust any lender that’s FCA-approved, and you can double-check the FCA register to find out whether they are!” So, if your company operates in the manufacturing sector, there are plenty of different avenues available for you to explore to protect yourself from cash flow issues. Use the different options available to you and combine them to provide your business with maximum flexibility.
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