How finance can support with everyday business challenges faced by the wholesale and distribution industry

1. Wholesale and distribution
How the right finance solution can
help overcome business challenges

2. We cannot solve our problems
with the same thinking we used
when creating them
Albert Einstein
What are the problems
facing wholesalers?

3. The latest Close Brothers Business Barometer
shows that late payments, working capital
and bank charges have all jumped up the
agenda for wholesalers and distributors,
while competitors and cash flow remain
persistent concerns.
18%
ƃ
16%
16%
13%
11%
7%
7%
%
6%
4%
£
£
£
Competitors
Late payments
Cash flow
Finding extra working capital
Bank charges
Tax/VAT
Access to good financial advice
Managing expansion
Lack of skilled staff

4. Economic confidence among small
and medium-sized businesses has
slipped, surveys show, leaving
firms fearful about fighting
for share of markets that may
not be expanding as quickly
as they had hoped.
The competitive threat is a
constant for wholesalers
#
1

5. The solution
Wholesalers must decide whether the time is right to invest
for growth, or whether to focus on protecting margins and
consolidating market position.
The right funding solution needs to be considered to support
both of these strategies.
The problem
Almost one in five
wholesalers continue to
highlight competitive
threat as a major
concern.

6. Hard-pressed small and
medium-sized businesses
are facing higher costs
than ever before in chasing
late payments, independent
research shows.
Late payments still causing
problems
Invoice
FINAL
DEMAND
#
2

7. The solution
While wholesalers must strive to ensure
customers pay their bills on time, they
have the option of monetising their
unpaid invoices through invoice finance.
Invoice finance can generate capital
even when clients continue to pay late.
The problem
One in six wholesalers cite late
payments as their main business
concern, the highest figure in the
Close Brothers Business Barometer
since June 2014.
Invoice
PAID

8. This is seen as one reason
why British businesses
are not as productive
as their international
competitors.
Lack of working capital is
another key constraint
#
3

9. The solution
Wholesalers looking to take advantage of the UK’s
economic recovery must put in place a funding
strategy that will allow them to invest for growth.
The problem
13%
of wholesalers
have become increasingly
concerned about where
they will find additional
working capital.

10. The Competition and
Markets Authority is
investigating whether
banks are offering
small and medium-sized
enterprises a good deal
on terms and conditions.
Bank charges cause wholesalers
more difficulties than ever
Ts&Cs
#
4

11. The solution
Many bank charges are the result of account defaults caused
by problems such as late payments. By seeking financing
solutions for such concerns, wholesalers can avoid incurring
unnecessary charges.
The problem
11%
of wholesalers
said they were worried about
bank charges in October
2015, up from 4%
in December
2013. £

12. of wholesalers are confident about the
prospects for the UK economy.
believe further declines
may lie ahead.
Wholesalers and distributors
at a crossroads
25%
25%

13. The solution
Wholesalers must address their business strategy for the months
and years ahead according to their current views but, whether
optimistic or more cautious, they will need a a tailored funding
and investment plan to fit their individual business’s needs.
Imaginative and innovative financing can help them prosper.
The problem
Some firms believe it’s time
to invest for the next phase of
growth while others are anxious
to protect their current position,
given the headwinds they
continue to face.

14. Life is like riding a bicycle:
to keep your balance, you
must keep moving
Albert Einstein
To grow or to consolidate?

15. Takeaways
Cash flow remains a serious issue for one in six firms in the industry
Competitive threat is a major concern for wholesalers – almost one in
five continue to highlight this issue
A lack of working capital is seen as a key reason why British businesses
are not as productive as their international competitors
Wholesalers must decide whether the time is right to invest for growth,
or whether to protect margins and consolidate market position
Seeking alternative forms of finance can offer wholesalers the opportunity
to improve cash flow leaving them free to focus on the business
The Close Brothers Business Barometer is conducted on a quarterly basis. It canvasses the opinion SME owners and
senior management throughout the UK and Ireland on a range of issues affecting their business.
£
£
?

16. Discover how to overcome wholesaler business problems
when operating during a tough economic climate
Download our free eGuide
Wholesale: to grow or consolidate?
Close Brothers Invoice Finance is a trading style of Close Invoice Finance Limited (‘CIFL’), a subsidiary of Close Brothers Limited. CIFL is registered in England and Wales with company
number 935949 and registered office at 10 Crown Place, London EC2A 4FT.
Industry report
Wholesale: to grow orconsolidate?
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