Seek help before a cash flow hiccup becomes a crisis

March 2, 2023

Businesses that have the potential to fly are failing because of cash flow and capital funding shortfalls. The Marches Local Enterprise Partnership’s access to finance champion PAUL KALINAUCKAS says help is available

Cash is king in business, but the proportion of small businesses with no cash reserves has increased since 2020, according to a report by the Enterprise Research Centre.

Having a lot of cash on hand is normally a positive sign, and strong cash flows allow a company more flexibility in regards to business decisions and potential investments.

However, it is a sad truth that more businesses fail for lack of cash than for lack of profit. Most are micro-businesses employing up to nine people.

You can be extremely profitable but have the rug pulled from under your feet if you run out of cash. Less than 25 per cent of micro-businesses and about one third of small businesses estimate that their cash reserves would last more than six months, compared to about 50 per cent of medium and large businesses.

So, size does matter.

That is why it is important to build up some cash reserves to cope with the unexpected and to look at alternative finance options such as leasing or loans. Most businesses that grow will require external finance at some stage, particularly if they have increased orders that need more working capital to service.

Unfortunately, 80 per cent of failed businesses are the result of poor finance management and poor cash flow forecasting so, in 2023, make sure you review your finances and investigate whether greater support could help with the financial management of your business.

Your first port of call should be the Marches LEP and Marches Growth Hub, which can both offer practical support and access to grants and finance for a variety of purposes.

These include the Marches Energy Grant, access to more than 30 business support and funding programmes, and partnership with British Business Bank and the Midlands Engine Investment Fund for wider funding opportunities and links to a host of alternative providers.

The Marches Growth Hub also offers advice and workshops for anyone running a business. For more information, visit the MGH support finder for details.

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The Marches Local Enterprise Partnership has now ceased trading and transferred all its functions to Shropshire Council working with Telford & Wrekin Council and Herefordshire Council, in line with the UK Government's plans for devolution.

The Marches LEP was established in 2011 and hands over an impressive legacy from its 13-year life. In that time the LEP invested over £196m in projects across the Marches, securing in excess of £100m of match funding and supported more than 66,000 business interactions.

The schemes supported have made tangible differences to local communities, increasing skills, creating jobs and improving the physical appearance of many towns.

We would like to thank all the LEP Board Members who have given their time freely over the life of the LEP, as well as all the staff who worked for the LEP over the years. We also want to thank our delivery partners, local education providers and local, regional and national stakeholders who helped us achieve so much.

The Marches Growth Hub will continue to support businesses and will be managed by Shropshire Council, supported by Telford and Wrekin and Herefordshire Councils. Each of the three Local Authorities will also continue to provide direct business support locally. Details of this support will be available through the Marches Growth Hub website and from the Local Authorities directly. Website: | email:

The Marches Careers Hub will continue to be delivered and will be managed by Shropshire Council, supported by Telford & Wrekin and Herefordshire Councils. Website: | email:

For any queries about Getting Building Fund (GBF), Local Growth Fund (LGF) and Marches Investment Fund (MIF) projects supported by the Marches LEP please contact:

For any finance queries please contact:

The solvent liquidation of the Marches LEP is being managed by the Evelyn Partners Limited. For any matter related to this please contact:

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