B2B Payments

Cash Troubles Bring The Summer Blues To SMEs


Today, the U.S. market is returning from a long holiday weekend, with Memorial Day considered the first official holiday of the summer season. Small business owners were likely hoping to see a boost in sales from tourism and the extra weekend day for shopping, but according to analysis from Hitachi Capital Invoice Finance, summer can be a difficult time for small businesses.

Researchers said on Friday (May 27) that SMEs are more likely to seek external funding in July than any other month, signaling the challenges small business owners face in the summer months.

“Trading activity might slow down, and invoice payments might take longer than usual to materialize, particularly if key people are away on holiday,” said Hitachi Capital Invoice Finance Managing Director John Atkinson in a statement.”To help bridge the funding gap, our data shows that SMEs are mow likely to seek cash flow finance.”

Reports added that stress on SMEs’ working capital can be “severe” during this time of the year, especially if their cash management strategy was lackluster prior to the start of summer.

Atkinson said there are key actions small business owners can take to survive the summer months.

“Improved business forecasting, for example, could enable the business to plan ahead for any dip in trading activity, and it may also be wise to delay nonessential expenditure during periods when cash flow is more likely to come under pressure,” the executive said. “If necessary, seasonal incentives could also be offered to encourage debtors to make prompt payments.”

Invoice financing has caught the eye of investors in recent months. Several deals have landed key venture capital at invoice financing startups, like Kickfurther, Platform Black and others.



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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