FEATURE
• Just 19 % of respondents said lack of access to funding had a negative impact on their businesses in the last year ; 46 % of these specific respondents cited high interest rates as an obstacle .
• Under one-quarter ( 23 %) of respondents reported not having access to all the liquidity they need to operate over the next 12 months .
• Only 30 % of respondents reported that getting a revolving line of credit or loan from a bank wasn ' t an option for their businesses .
In light of this , the C2FO survey found that there is still significant room for companies to examine new capital strategies – such as reducing cash conversion cycles – to offset inflation , improve cash flows and support growth .
Chris Atkins , President of Capital Finance and Capital Markets for C2FO , said : “ Many businesses are seeing the hard work of their post-pandemic recovery being eaten away by costs . They can ’ t control the economy , but they do have more control over the health of their cash flows than they might realise . As new efficiencies are found , especially with working capital , companies are more empowered to determine their course – and not just accept tighter margins as the new normal .”
How inflation is forcing companies ’ hand
Inflation has replaced COVID-19 as the primary threat to businesses . Over the last 12 months , many businesses have resisted passing on price increases in order to preserve customer relationships . This strategy now looks to be untenable , according to many of the business leaders surveyed . In the US :
• Over half ( 58 %) of respondents who expect inflation to have a negative impact on their business said they would likely raise prices if the impact was as bad as feared .
• Under one-fifth ( 22 %) of respondents said they expect to increase prices by 6 % or more over the next 12 months .
As expected , price hikes are encouraging larger corporations to revisit their supplier relationships and seek lower-cost options . Companies opting not to put customer relationships at risk through this route are increasingly considering other cost-cutting measures like minimising pay increases , delaying investments , scaling back production and decreasing their workforce to combat financial challenges posed by the shifting economy .
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