Many of the start-up companies that managed to weather the recession are now expanding as part of the next generation of British businesses.
However, although there has been a marked increase in the number of SMEs showing growth in the last 12 months, banks seem increasingly reluctant to lend to small and medium firms, meaning more companies are turning to alternative sources of funding to provide working capital.
There are countless reports of small firms facing difficulties in securing the funds they need from banks in the wake of the credit crunch, whilst others are similarly hampered by slow-paying customers.
One of the key alternatives to traditional bank lending is invoice discounting – which allows companies to expand and grow without having to fret on the support of their bank manager.
Rather than businesses being constrained as invoices take months to be paid, invoice discounting frees up this locked-in capital and allows firms to concentrate their efforts on the day-to-day nuts and bolts that make their business a success.
Market Invoice is one of the fastest growing players in this market, having traded in excess of £210m of invoices since it was formed in early 2011. Along with the peer-to-peer providers, it is helping to improve the way businesses manage their cash flow by giving companies the flexibility to quickly access the cash tied up in their invoices.
This means that rather than waiting months to be paid, SMEs can access funds within a couple of days, which enables them to grow their business without having to wait for invoices to be settled.
In the last two years there has been a shift in the way small firms raise funds and many are turning to alternative providers, who can come up with cash quickly.
Number of payday borrowers struggling as debts still rise
StepChange, the debt charity, has reported that the number of people struggling with payday loans has risen by 42 per cent in the past year.
The scale of the problem is alarming, with StepChange having dealt with almost 44,000 consumers who were in trouble the first half of 2014, up from about 31,000 in the same period last year.
The charity is pushing the Financial Conduct Authority to take further action to protect consumers who suffer from such financial hardship, including an even stricter cap on payday loan fees.
The city regulator agreed to review the suggestion as part of its existing consultation which ended this week.
Other parties continue to remind people just how crippling the costs can be, particularly if consumers borrow on a regular basis.
For example, the potential cost of borrowing over a longer term from payday lenders was illustrated in a report from Amigo Loans, the UK's biggest guarantor loan provider. It looked at the impact on the cost of a basket of household goods if you applied the Wonga APR of 5,853 per cent. A pint of milk costing 49p worked out at £29.17 and a £1.68 bag of teabags a shuddering £100.01.
James Benamor, of Amigo Loans, said: "Although our research is tongue-in-cheek, it puts a very serious and complex issue into perspective. The sheer scale of some APRs can cripple vulnerable borrowers and action must be taken."
He added: "The problem here is that payday lenders may be confusing customers by advertising the volume of money you can borrow and the speed at which it can be obtained. People need to consider the representative APR."
Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies