Businesses don’t fail because of lack of profit, they fail because they run out of cash. Many have already burned through their cash reserves following a significant drop in income and have had to turn to governmental support to obtain much needed cash to survive.
Let’s put things into perspective. In the 76 days from 23 March 2020, UK SMEs had been granted over £33bn in funding lines through the governments Bounce Back Loan scheme and the Coronavirus Business Interruption Loan scheme. According to statistics from UK Finance, this is almost £9bn more than the total volume of new loans issued to UK SMEs during the whole of 2019.
While this will provide businesses a lifeline, this still leaves a liability that they will need to pay back. And business rates will need to return, the furlough scheme will be phased out and income will not bounce back to pre-crisis levels immediately. The pressure will not go away as we exit lockdown.
Ultimately, it has never been more important to keep cash flowing. One way to achieve this is to get your suppliers paid sooner. However, this isn’t always that simple as your organisation is also likely to have felt the impact of the crisis. In fact, many businesses have had to resort to extending terms to their suppliers to protect their own cash positions. This can cause severe distress to businesses that are likely to be suffering already, unless they give their suppliers an opportunity to get paid sooner.
Supporting your supply chain is vital…and despite all of the points above, it is still possible. Proactis has created a market-leading supplier financing solution called bePayd that supports the entire supply chain in getting paid sooner, and unlike most other early payment services, it also delivers to the smallest of suppliers.
With bePayd, you can support your suppliers by getting them paid sooner for invoices not yet due for payment - all in the simplest and swiftest way possible, just 3 clicks of a mobile. You can also do this more cost effectively and far easier than traditional funding methods, all while creating operational and tangible financial benefits to your organisation. To top it off, it is completely optional, and suppliers can choose not to take an early payment.
It goes without saying that, for bePayd to achieve its full potential, organisations will want to support supply chains. And realistically, all businesses should want this.
Given the current situation, Proactis has ensured that the cost and efforts involved in delivering bePayd to your suppliers is low and will result in a significant return to you and your supply chain. It really is a “no brainer”.
The bePayd team is very keen to talk to and support organisations and their supply chains while we emerge from this crisis. To find out more either visit the website or email hello@bePayd.com.