Running a business has always involved a bit of a juggle, and if you have found yourself spending more time juggling the bank balance lately, you’re certainly not the only one. A recent survey of 1000 SME decision makers found that 82% experienced at least one cash flow difficulty over the last 12 months, with rising overheads, late payments and limited access to finance all playing a part.
For most SMEs, the pressure isn’t coming from one single issue but a combination of several.
Rising operating costs are the most immediate. Wages, rent, energy and supplier costs have all increased, while margins in many sectors have not. For a lot of businesses, it now costs significantly more just to keep the lights on, leaving less headroom to absorb shocks or invest in growth.
Late payments continue to put a strain on working capital. Even profitable businesses can find themselves under pressure when customer payments slip.
Access to suitable finance is the third pressure point. While funding exists, it isn’t always available when it’s needed, or on terms that reflect how a business actually operates. Together, these pressures create an environment where cash flow feels harder to predict, and financial decisions carry more risk. But understanding that these challenges are not individual failings is the first step towards building a good defensive strategy.
Understanding when your money actually moves and not just what you’re owed is critical. Know your weekly gaps. Mark exactly when the big hits happen (VAT, rent, and payroll) and be realistic - if a client usually pays in 30 days but occasionally it is 45, map it as 45 days.
Regular cashflow forecasting and clear oversight of upcoming commitments reduce surprises. You need a rolling 13-week forecast. Why 13 weeks? Because it covers a full quarter.
Late payments are still one of the biggest cashflow drains for UK SMEs.
If you have outstanding invoices over 30 days, you are essentially providing interest-free loans to your customers. Use software to send reminders before the due date, and if a client is a serial late payer, move them to 50% upfront or shorter terms.
The worst time to look for money is when your back is against the wall. Open a facility now but don’t use it yet. Whether it is an overdraft, a revolving credit line, or invoice finance, get it set up while your books look healthy.
Before looking at specific funding products, many SMEs benefit from understanding how their business is viewed by lenders. A structured credit insight process helps clarify what’s being reported, what influences your Delphi score, and where simple improvements may be possible. That visibility alone can widen funding options.
Phoenix Commercial Finance helps businesses improve their Delphi score through a strategic, step-by-step approach to funding. Instead of submitting applications that are unlikely to succeed, the focus is on repayment behaviour, which shapes lender confidence over time.
As an example, one business owner recently approached us after being rejected by multiple lenders. His credit profile was weak, and Tier 1 lenders were unwilling to lend. The funding requirement was urgent, and, under significant pressure, our client was close to accepting unsuitable funding simply because it was all that was available to him.
We recommended a different approach - a short-term loan from a credit-improvement lender, structured with weekly repayments. The loan was smaller than originally requested, but it allowed our client to demonstrate strong repayment discipline and begin improving his Delphi score in a more controlled way.
Within months, his credit profile strengthened, and our team was able to submit his loan application for a larger, longer-term funding solution, aligned with his business’s stronger credit position.
There are over 5.7 million private sector businesses in the UK - 99.8% of them are SMEs, but all are being squeezed from both sides.
The business owners we speak to on a day-to-day basis are looking for breathing room right now. A setup that gives them a bit more control and the confidence that one unexpected blow won’t derail their entire operation.
We are committed to supporting UK businesses in strengthening their resilience - not just for right now, but for what comes next.
If you’d like to run through your current setup and explore what improvements could be made, drop us a message, and a member of our team will be in touch with you shortly. Alternatively, you can chat with us on WhatsApp.
