Financing growth in a low-growth economy: cash flow in uncertain times

GlobalData

Tue, Apr 8, 2025, 6:51 AM 4 min read

Chancellor Rachel Reeves' caller Spring Statement delivered a stark forecast for the UK economy, citing the continuing uncertainty and a ‘world that is changing earlier our eyes.’ Indeed, arsenic portion of the announcement the Chancellor admitted that the autarkic Budget of Responsibility (OBR) had revised down its forecast for maturation successful the UK for 2025, from 2% to conscionable 1%.

This volition undoubtedly origin interest for businesses of each sizes, successful each sectors arsenic they look to crippled their way forward.

However, contempt the uncertainties and myriad challenges, firms indispensable proceed to find ways to innovate, and to prioritise, and question solutions that let them to execute growth.

In a slow, stagnant economy, currency travel absorption takes connected other value for businesses pursuing growth, integrated oregon inorganic. Revenues, peculiarly successful this environment, often lag operational expenses, payroll, and overheads, straining operations and causing challenges to the maturation philosophy.

Pursuing maturation successful a low-growth system brings with it respective challenges, including those astir currency flow. Increased contention and tighter margins thrust businesses to chopped prices and costs, which whitethorn harm semipermanent growth. Longer outgo presumption and lawsuit delays exacerbate the situation. This rhythm is 1 that businesses indispensable strive to avoid. To bash so, they indispensable prioritise outgo management, operational efficiencies, and beardown lawsuit relationships to enactment sustainable and support profits.

The benefits of pursuing maturation during a challenging economical situation are manifold. Firstly, it offers the payment of accrued marketplace share, and arsenic a result, improved nett margins. Internally, it besides encourages higher worker engagement – with staff, and cardinal stakeholders actively portion of the propulsion for managed growth, perchance contrasting the attack against manufacture peers who whitethorn beryllium much reluctant to proactively question marketplace enlargement during the challenging concern climate.

Many forward-thinking enterprises are exploring alternate financing options to stabilise fiscal structures and supply the agility to capitalise connected maturation opportunities erstwhile they arise. These agile companies are pursuing maturation by optimising currency travel ratio and expanding their entree to recognition by turning to autarkic funders for fast, flexible financing, including commercialized financing and invoice financing.

Businesses looking for accepted concern solutions tin beryllium hamstrung by slower sales, rising operational costs, and underperforming concern metrics, which are each imaginable outcomes successful a low-growth economy. As accepted lenders go little tolerant of hazard successful this challenging environment, leading autarkic lenders are filling the recognition spread with specialised backing solutions.