Bank sets up £100m fund to help with late payments

The launch of the fund follows Yorkshire Bank research which shows that small enterprises in Yorkshire are facing, on average, a seven-week wait for monthly invoices to be paid, a delay which, in some cases, is threatening their survival.

Yorkshire Bank has ring-fenced the £100m cash flow finance package from its £1bn Business Expansion Fund, which was launched last year.

The £100m fund is available to both new and existing Yorkshire Bank customers through its confidential invoice discounting service.

Martin Rothera. Yorkshire Bank’s head of invoice finance, said today: “This £100m fund underlines our enduring commitment to the invoice finance market in the current tough business climate, and will provide real support for many businesses which face difficulties through no fault of their own.

“Late payments can put immense pressure on small businesses as cash flow dries up, leading to pressure on their ability to pay their own bills.”

Mr Rothera added: “Providing an invoice finance service which suits new and existing customers is a key part of our support for Yorkshire businesses, particularly those which are working harder than ever to compete in some very challenging economic conditions.

“From our research, we know that cash flow and invoices being paid on time are still a primary concerns for SMEs.

“Cash flow is the lifeblood of a business and invoice finance is an extremely useful tool for SME owners.

“It’s something which more businesses could benefit from accessing.”

Often referred to as “cash flow finance”, invoice finance allows businesses to access up to 85 per cent of an invoice’s value as soon as it is issued, rather than waiting for it to be settled.

A Yorkshire Bank spokesman said that in the last year, it had seen many businesses seeking to strengthen their own invoicing and credit control procedures, using invoice finance and credit protection products.

The bank’s research indicates that one in 10 small businesses believe they would be forced to drastically restructure their business, or even face closure, if their customers take 90 days to pay invoices.