— and What Can Be Done About It?
1. The Cashflow Crunch Inside UK Manufacturing
Manufacturing remains the backbone of Britain’s economy, employing over 2.5 million people and contributing nearly 10% of GDP. Yet, beneath those figures lies a growing frustration: cashflow. Across the UK, even profitable manufacturers are struggling to stay cash positive.
The culprits? Rising material costs, long supplier chains, and late customer payments. Energy prices remain volatile, while supply chain disruptions and labour shortages are adding pressure. For many firms, it’s not a question of profitability—it’s about liquidity.
In a 2024 Make UK survey, 62% of manufacturers cited working capital shortages as a barrier to investment. Many spend more time managing cash buffers than innovating.
“You can’t build the future if you’re constantly chasing last month’s payments.”
2. Why the Problem Persists
The manufacturing model is inherently capital-intensive. Cash goes out early for raw materials, wages, and energy—long before revenue comes in from customers. This timing mismatch creates chronic strain.
Even digitalisation, while critical, can widen cash gaps. Upgrading to new ERP systems, robotics, or automation tools requires upfront investment, often without immediate returns.
The post-Brexit and post-pandemic environment hasn’t helped. Export delays, higher shipping costs, and global component shortages have compounded the problem. Manufacturers are walking a fine line between resilience and risk.
3. Practical Strategies to Regain Control
- Get Visibility Before Velocity
Too many manufacturers scale production before tightening visibility over cash cycles. Implement rolling 13-week cashflow forecasts and link them directly to operational KPIs—like production lead time or raw material spend. - Streamline Supplier Terms
Negotiate early payment discounts where possible, but also balance credit terms to avoid bottlenecks. A strong cash position isn’t about paying later—it’s about paying smarter. - Turn Receivables into Working Capital
Invoice finance and selective invoice discounting can release up to 90% of invoice value within days, bridging liquidity gaps without waiting 60–90 days for client payment. - Align CapEx with Finance Cycles
When upgrading machinery or robotics, don’t deplete working capital. Match funding terms with asset life through equipment or asset finance. Let the equipment pay for itself over time. - Diversify Funding Sources
Avoid reliance on overdrafts or short-term loans. Smart capital blends—like invoice finance, growth loans, and equipment finance—create flexibility and reduce stress on any single funding line.
4. Funding Solutions That Fit
Challenge | Solution | Benefit |
Long customer payment terms | Invoice finance / selective invoice discounting | Access up to 90% of invoice value within 48 hours |
Need to purchase new machinery | Equipment or asset finance | Preserve cash while spreading cost of upgrades |
Seasonal production peaks | Working capital or growth loan | Smooth out liquidity during demand surges |
Supply chain delays | Trade or stock finance | Secure materials before prices rise or stock depletes |
5. The GIC Capital Approach: Strategic Capital for Manufacturing Growth
At GIC Capital, we understand manufacturing’s rhythm—cash in, cash out, and everything in between. We work with business owners to design bespoke capital structures that protect liquidity and accelerate growth.
Our funding solutions include:
- Equipment & Asset Finance: Fund essential upgrades without draining reserves.
- Invoice Finance: Unlock cash from unpaid invoices quickly.
- Growth & Working Capital Loans: Support expansion, recruitment, and innovation.
- Trade Finance: Strengthen supply chain resilience.
Each solution is designed to fit your unique production cycles and payment realities—not the other way around.
6. A Thought to Leave You With
Cashflow challenges are not signs of poor management—they’re a byproduct of running a complex, capital-intensive operation in volatile markets. But with the right structure and partner, liquidity can become a lever for innovation, not a limitation.
💭 What would you do differently if your cashflow worked for you—not against you?
7. Ready to Take Control of Your Cashflow?
We help manufacturers across the UK secure the right capital to accelerate transformation—without losing control, clarity, or confidence.
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