For SMEs in the UK, the last five years have been a financial catastrophe. The COVID-19 pandemic saw nearly 40,000 businesses disappear, with the surviving businesses getting hit with the cost-of-living crisis. Businesses in 'critical financial distress' increased by 25% in the latter months of 2023. This has seen many ponder the thought of going to their bank for business loans. Yet, customers of UTP can benefit from fair and flexible Cash Advance funding.
It was in 2022 that both food and energy prices increased drastically as inflation hit 9.6% – the highest rate in four decades. Since this spike, inflation has slowed, with the annual inflation rate for 2023 being 4.2%. For many consumers, the increasing prices do not correlate with their wages. According to the Office of National Statistics, over 40% of adults struggle to pay their energy bills. A further 45% are intentionally using less fuel in their homes (such as electricity and gas) to combat the cost-of-living crisis. For SMEs around the UK, the decrease in disposable income has left them in a tough position. Retail sales volumes fell by 3.2% in December 2023. This has been the biggest fall since COVID-19 restrictions in January 2021. Consumers are now spending their money with more caution and are limiting themselves of luxuries. People in the UK seek out discounted prices, bulk buys, and online purchases in a bid to spend less money. Due to SMEs ordering smaller quantities of stock, they typically endure a lack of economies of scale. This is then reflected in the final cost to the consumer. Therefore, SMEs typically cannot offer the discounted prices that larger enterprises can. Heightened overhead costs also further contribute to the increased price the consumer pays. The domino effect then comes into full swing, as SME owners have less disposable income to put back into their business and personal lives.
From 2021-2022, SMEs taking out loans increased by 12.8%, to £65.1 billion. 69% of these SMEs claimed that their reason for taking out external finance was 'cash flow related'. Due to consumers' limited discretionary spending, businesses are lacking the constant cashflow they once had. SMEs with 0-9 employees required funding the most, with 94% needing external funding to maintain day-to-day operations. Asset finance loans increased by 22% in the last year. Research from Barclays shows that nearly half of SMEs used these loans to modernise their business. This money is then spent on optimising operational efficiency and revamping décor. Investment in technology can help streamline production times and make businesses more energy efficient, saving the business money long term.
For over 10 years, UTP has helped over 52,000 merchants accept credit and debit card payments. They have processed over £15 billion in transactions and managed to save their customers up to 30% on transaction rates. Cash Advance is their funding solution that can see businesses receive up to £150,000. Unlike traditional bank loans, UTP don't require proof of collateral and will deliver the funding within 14 days. With UTP's Cash Advance, businesses pay in proportion to their earnings. The business in question will agree to a set percentage that they pay back each month. This means that if one month is slow for the business, UTP will take a smaller amount of money, offering a fair and flexible repayment schedule. Unlike other merchant service providers, there is no set repayment deadline with UTP.
To aid businesses cashflow in the current economy, UTP also provide Faster Processing to their customers. This is a payment system that allows SMEs to get paid within the hour, rather than the industry standard of 3-5 business days. Up to 70% of business profits go back into the company. With the strain of the cost-of-living crisis, more and more businesses are needing quicker payment alternatives. Businesses can get paid after each card transaction, on an hourly basis, or at the end of their trading day with Faster Processing. UTP provides this service at no extra charge.
This can be a daunting time for SMEs in the UK. Yet, it is important to note that there are businesses, such as UTP, that provide fair, financial aid. With UTP card machine for business you can make reliable contactless payments throughout the day.
Organisation: UTP Merchant Services Ltd
Website URL: https://www.utpgroup.co.uk
Email: [email protected]
Phone: 0330 99 99 900 (Support)
