Factoring and the small and medium sized enterprise (SME)

Gillie, S.P. (2002) Factoring and the small and medium sized enterprise (SME). (MPhil thesis), Kingston University.

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Abstract

The most up to-date figures show that total factoring volume (as far as turnover is concerned) of £77.1 billion ranks the UK as the largest factoring market in the world ahead of the USA and Italy (Bank of England, 2001, p.25). Also, recent evidence reveals that SMEs in the UK still ahve a poor or negative perception of factoring or they lack knowledge as to what it can offer. However, even taking the above into account there has been no substantial research carried out in relation to factoring and SMEs, although research has been done on the supply side of this topic. This study is comprised of in depth face to face interviews with 20 manufacturing SMEs. The sample was derived from two CD Rom databases commonly known as FAME and EMMA. This agenda explores SMEs perceptions of factoring and finds out their reasons for not wanting to sign up with a factor. Also, the study looks at why some companies do enter the factoring relationship and how their decision to use a factor is established. The results sho that SMEs perceptions fall into 3 general areas of: Image, Cost and Loss of Control and that the main reason for companies using a factor is due to severe cash flow problems. Finally, the project looks at the relationship factoring has with late payment and some useful answers to this perplexing and worrying problem emerge from the research findings. This problem is also given a high profile in the media at the moment with the government legislation which will charge late payers specified amounts of interest (this was introduced on 1/11/98). The Governments small business minister feels that this route is the best way to proceed and they hope this will go someway towards improving the payment culture within today's SMEs. It is also envisaged that this study will show how good a SMEs credit management function is in relation to that of factoring.

Item Type: Thesis (MPhil)
Physical Location: This item is held in stock at Kingston University Library.
Research Area: Business and management studies
Depositing User: Automatic Import Agent
Date Deposited: 09 Sep 2011 21:39
Last Modified: 23 Jul 2013 08:19
URI: http://eprints.kingston.ac.uk/id/eprint/20838

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