Inflation remains the No.1 threat to
companies, while long cash conversion cycles threaten access to the
working capital needed for growth.
KANSAS
CITY, Mo., May 1, 2024 /PRNewswire/ -- The
majority of today's business leaders expect to see revenue growth
this year, with 32% believing revenues will grow by more than 10%,
according to the 2024 Working Capital Survey from C2FO, the world's
on-demand working capital platform.
Survey shows nearly 1 in 4 businesses don't
have access to enough capital to operate for a year
While most respondents said they currently have the liquidity
they need, nearly 1 in 4 businesses don't have access to enough
capital to operate for a year. Nearly 60% said that increasingly
longer payment terms with customers require them to find
alternative sources of working capital to fund their growth
goals.
Respondents identified several challenges to accessing
capital.
- 54% named high interest rates as the largest obstacle to
funding access in 2023.
- 42% expected higher interest rates to negatively impact their
growth in 2024.
- Only 17% of suppliers reported having a borrowing rate below 5%
at the beginning of 2024.
The survey, conducted in January
2024, asked over 1,000 financial decision-makers and
executives in the United States,
the United Kingdom, Mexico and India to determine their economic outlook and
current working capital usage and needs. The respondents
represented businesses of various sizes, with 80% serving in
executive roles and 65% coming from companies that had been in
business for more than 10 years.
Most companies' overall economic outlook remains positive.
Globally, companies expect revenue growth, headcount increases and
only mild price increases:
- 78% of companies are expecting revenue growth.
- 43% said they expect to increase headcount, while only 3%
predict a more than 10% headcount reduction.
- 59% said they plan to increase prices by 1%-10%, suggesting
inflation may still be hard to beat in 2024.
Analysis of additional C2FO network data from 2023 underlines
the optimism about growth and the anxiety about inflation. With
over 45 million invoices loaded onto the C2FO platform nightly, the
average unique invoice size increased by 12% last year.
"Many businesses are seeing conditions improve, but the
post-pandemic pains still remain. Supply chain issues can pop up,
and worker shortages and labor costs still threaten nearly half of
the survey respondents," said C2FO Chief Sales Officer Colin Sharp. "They can't control the economy,
but they do have more flexibility and control over the health of
their cash flows than they might realize."
With loans becoming more expensive or out of reach, businesses
looking to strengthen their capital can get more out of their cash
flows by looking outside traditional borrowing.
Dynamic discounting is one such approach. This model helps
businesses get paid early for their outstanding invoices in
exchange for a small discount. It differs from the more well-known
practice of invoice factoring, which often comes with higher costs
and greater disruption. Per the survey:
- Just 20% of global respondents currently use early payment
options.
- C2FO Early Pay can significantly reduce a company's time to be
paid to less than 10 days, far less than the 30+ Days Sales
Outstanding (DSO) reported by roughly half of global
respondents.
"Supply chain finance (SCF) and other cash management solutions
are nothing new to large enterprises. However, they're missing out
if they aren't exploring the next generation of solutions that
deliver greater flexibility in an unpredictable economy," Sharp
said. "Modern supplier finance solutions like C2FO's Dynamic
Supplier Finance™ enhance what works in a traditional SCF program
by making it faster, more resilient with a broad funding network,
and more accessible to all suppliers."
As the global leader in working capital, C2FO is working to
ensure solutions are available to businesses of every size and
industry. The International Finance Corporation (IFC) estimates
that for every $1 million provided to
a small or midsize business, 16.3 jobs are created, making
equitable access to funding a win-win for all businesses. The C2FO
platform helps accelerate payment from enterprise customers, using
their own balance sheet, a network of banks or a combination of
both, to their suppliers in exchange for a small discount, putting
money in their accounts faster, sometimes on the same day. No
borrowing is involved, and it is far more convenient and
cost-effective than other forms of financing. A full report on the
survey's findings can be downloaded here.
About C2FO
C2FO is the world's on-demand working capital platform,
providing fast, flexible and equitable access to low-cost capital
to businesses worldwide. Using patented Name Your Rate®
technology and a suite of working capital solutions, companies can
get paid sooner by the world's largest enterprises and banks —
unlocking billions in risk-free capital. With a mission of ensuring
that every business has the capital needed to thrive, C2FO has
delivered more than $350 billion in
funding around the world. Founded in 2008 and headquartered in
Kansas City, USA, with offices around the globe, C2FO is
working to build a better, more inclusive financial system every
day. To learn more, visit c2fo.com.
Media Contact
Carrie Bratcher
pr@c2fo.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/global-survey-finds-business-leaders-optimistic-about-2024-despite-working-capital-challenges-302132467.html
SOURCE C2FO