News in brief: late payments, asset finance, email marketing, Brexit

News in brief
News in brief

Late payments to SMEs on the rise

There has been a sharp rise in late payment of invoices to SMEs - 60% of invoices were paid late in 2015, compared to 50% in 2013 and 54% in 2014.

These figures come from a report by MarketInvoice, which found that late payment is a UK specific problem, with other major economies performing far better:

UK Blue chip companies are more likely to pay late (62.2%) than the public sector is second (61.7%) or small companies (60.9%) – though all records are poor.

High Street retailers (69.8% of invoices paid late) and supermarkets (68.7%) are the worst performers, with clear evidence of consistent bad practice across these sectors. Banks (for once) provide a good example with just 44.7% of invoices paid late.

BLME acquires SME asset finance provider

The Bank of London and The Middle East (BLME), a leading finance provider to UK mid-market companies, will acquire SME asset finance provider, Renaissance Asset Finance (RAF) led by industry expert Hugh Sigrist.

BLME initially provided a finance line to RAF in order to access and support the UK SME sector, complementing the Bank’s focus on the UK’s mid-market. Having supported the launch and impressive growth of RAF BLME decided that 2016 was the right time to realise its option to acquire RAF’s shares.

BLME head of leasing Fred Yue said:

“BLME and RAF have worked together since the business launched in 2014, when BLME supported the start-up phase with a £35 million funding line. Since 2014 RAF have exceeded all their initial business objectives and have provided a tailored service to the UK SME sector.

“Despite the efforts made over the last few years the UK SME sector like the mid-market, remains underfinanced. Our two businesses share the joint objective of filling this funding gap, with BLME focusing on the mid-market and Renaissance targeting the smaller ticket end. Today, we come to the market together as a highly successful Asset Finance Business focussed on growth.”

SMEs not investing in email marketing

Only one third of small businesses have adopted email marketing platforms like FreshMail or Godaddy, but those who are using it rate it as their highest performing marketing method.

Similarly, nearly three quarters (74%) of marketers believe email produces or will produce ROI in the future. As most small businesses don’t have a dedicated marketing team, an easy-to-use, intuitive tool can be useful in running a successful, growing business, according to research by GoDaddy.

Around 60% of businesses still lack a website with over half (54%) of them fearing their business will fail to grow within the next 3-5 years as a direct result of not being online. Counter to this, three quarters (75%) of small businesses with a website said they feel they have a competitive advantage over businesses without.

“Being online is crucial for small business owners and email is still the most preferred form of business communication for reaching out to potential customers,” says GoDaddy VP EMEA Stefano Maruzzi.

A UK with weaker European connections could damage trade

Around 60% of SME owners would vote to stay in the European Union, with only 17% supporting a ‘Brexit’.

This is according to a recent survey of owner-managed businesses commissioned by accountancy firm Moore Stephens, which found that SME owners worry that an erosion of the UK’s position within Europe could harm growth opportunities as the cost and complexity of trade increases for UK goods and services.

Partner at Moore Stephens Mark Lamb commented: “Owner-managed businesses are concerned that future growth will be disproportionally hit by a UK exit as they would no longer compete on a level playing field in the EU.

“Economic and political uncertainty is already impacting trade for some SMEs, and there is a fear that leaving the EU could severely destabilise business growth in the long-run.”

SMEs divided over the value of commercial properties

Just over a quarter (27%) of owner-managed businesses (OMBs) believe the value of commercial property has passed its peak in the UK. Meanwhile slightly less than three quarters (73%) of OMBs think the value of commercial property will culminate within the next five years.

According to the latest OMB Barometer from Bank of Cyprus UK, the ripple effect of the property market, where London property values set the pace for the UK, can be seen through the different regional responses. Just under two thirds (65%) of OMBs in London and the South East believe commercial property values will peak by the end of 2018, compared to less than a third (30%) in the East Midlands, where a quarter (25%) say it won’t happen until 2020.

Lakis Kasapis of Bank of Cyprus UK said: “Despite tax changes on stamp duty and the introduction of capital gains tax for foreign property owners, it is encouraging to see that three quarters of OMBs believe the peak is yet to come. In spite of government legislation and concerns over global market volatility, small businesses in the UK are optimistic and believe the next five years still hold value for commercial property.”