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Social enterprises seek working capital finance to maintain a steady cash flow

Social enterprises companies access working capital finance to keep their business running smoothly.

A report carried out by Social Enterprise UK and the Access Foundation discovered that they are facing challenges in their day-to-day operations. They are now turning to working capital finance to keep on track.

Over 70% of social enterprises receive over three quarters of their income from trading. This means that it's vital that their cash flow is steady. The report studied the changing financial status of social enterprises over four years. Research found that maintaining working capital is becoming increasingly difficult.

In 2011, only 28% of social enterprises sought working capital finance. This increased over the next four years to 43%. This could be due to budget cuts, meaning tighter margins and restricted contracting and sub-contracting arrangements.

Government grants are increasingly more difficult to attain. Struggling enterprises should look to alternative methods to boost their working capital finances. Enterprises in more deprived areas may struggle further to receive government help. Business costs, such as rates, are higher in areas that don’t generate a large amount of income.

Working capital finance for social enterprises needs to be flexible. It needs to fit around their needs and allow them to build resilience in their market. A business cash advance allows enterprises to quickly receive funds to boost working capital, with flexible repayments that fall in line with card takings.

With no late payment or early repayment fees, a business cash advance enables companies to access funds without the fear of incurring further costs. To find out how a business cash advance could help boost your working capital finance, get in touch with one of our advisors.

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