This is in order to survive their exclusion from the National Insurance Contributions (NIC) holiday which began on 6 September, warned Bibby Financial Services.
The NIC’s holiday is expected to save 400,000 new businesses outside of these regions up to £50,000 a year for three years. However, businesses which are not eligible for the scheme need to maintain tighter credit-control as they look to establish and then grow their company in a volatile business climate.
Andy Leopold, Bibby Financial Services spokesperson for the South East, said: “The argument that the London and South East area has the highest density of private sector jobs in the UK and so does not need support from NICs will be of little consolation to firms struggling in the current financial climate. The challenge of forging a successful business in the aftermath of a recession is hard enough and by not being handed the same opportunities as others, this becomes an even greater challenge.
“Due to limited funding, the Government aims to use NIC’s to stimulate private sector start-ups in the regions that are most heavily affected by public sector job losses, particularly the North of England and the Midlands. Although the Government has good intentions towards start-ups, perhaps they have overlooked the implications the initiative could have on businesses that are ineligible, particularly at a time when many are struggling with limited or no access to finance.
“Those businesses which feel disadvantaged and concerned for their long-term future should look to explore other ways of sourcing financial support and maintaining a healthy cash flow. Securing finance from the banks remains an issue for many UK firms and so other funding options, such as invoice finance, should be explored.
“Invoice finance is a flexible form of funding that enables firms to unlock the funds tied up in one of their biggest assets, namely outstanding customer invoices, leading to an immediate cash injection and ongoing supply of funds into the business. This ensures they are in a strong position to face any challenges and seize any opportunities that come their way.”
