Easing cashflow will promote growth says banker

RELIEVING the pressure points on a company’s cash flow could promote sustainable commercial growth and enable potentially lucrative opportunities to be explored, a senior banker in Birmingham has claimed.

Stephen Cronin, managing partner at Yorkshire Bank’s Financial Solutions Centre (FSC), said he believed the ability of a company to free-up immediate cash flow could be one of the most important steps to ensuring sustainable future business growth, whether this is employing new staff, expanding premises, buying new equipment or developing new products.

He said: “Easing the pressure on cash flow is one of the most significant moves a business can make. It doesn’t necessarily mean more cash in the bank but it can afford a business the chance to pursue quality opportunities it might otherwise have been unable to realise.

“In the current climate many businesses want to be able to trade comfortably within their means but still retain the flexibility to pursue opportunities that could potentially deliver real commercial growth and help them secure their future.”

His comments come off the back of recent research by Yorkshire Bank which found the key priority for business managers and owners in the next 12 months will be cash flow management.

Around 45% of businesses questioned said the careful management of finance, expenditure and cash flow would be their top priority for the year ahead, as opposed to 32% and 39% of businesses which said training or staff retention and recruitment respectively were their main priorities.

“While the timing won’t be right for every business, strong businesses which have been able to withstand a challenging economic climate may increasingly see the ability to reinvest cash as a key catalyst for growth,” added Mr Cronin.

In response to customer research and feedback, Yorkshire Bank recently launched its ‘Investing for Growth’ support initiative to help well-performing UK trading business take advantage of quality growth opportunities.

Loan repayment holidays, interest-only repayments and extended loan and credit facilities are some of the measures incorporated into the scheme.

Business customers taking up the offer will be encouraged to invest the cash back into their business in the form of expansion, new staff, equipment and machinery, and product development.

“The type of support a company needs is not one-size-fits-all and nor is the time when it may be needed. Every business needs to consider whether the time is right for them and what might help them achieve sustainable future growth,” said Mr Cronin.