Family Business Report 2024: Managing cashflow and navigating growth amidst inflation


The majority of family and owner-managed businesses are concerned about inflationary pressures on costs over the next 12 months, according to the latest survey by Armstrong Watson.

Navigating cashflow and growth for Family Businesses in 2024

2023 reflected some of the highest inflation and interest rates of recent history but businesses have not always been able to pass these inflationary cost pressures through to the end consumer, leaving many with margin compression and a keener focus on cashflow management through this turbulent year.

The impact of inflation on family-owned enterprises

The Family Owned, Privately Owned and Owner Managed Business Survey Report 2024 found that this was the biggest concern among the 300 businesses who responded, with 54% who said they are ‘somewhat concerned’ and 20% who are ‘very concerned'.

Inflationary pressures may also be a key reason why 89% of respondents find themselves under some form of pressure to adapt and innovate to keep up with the ever-changing environment.

Financing strategies amidst economic fluctuations

For family and owner-managed businesses, raising financing through bank debt has always been a challenge, with the high street banks increasingly focusing on larger corporate clients, leaving few providers with genuine appetite in the SME space.


The shift in funding preferences for SMEs

Working capital

Working capital finance or own capital have been the mainstay of funding for this segment of the market and this continued in 2023, with the majority of businesses surveyed looking to fund growth over the next three years using only these two methods. Working capital and invoice finance solutions remain the preferred method for many to help with monthly cashflow management, but we have seen an increase in those respondents considering bank loans, with 24% in 2024 compared with 15% in 2018.

Bank loans and asset-backed lending

Bank loans are still active in the market for businesses that have a good element of security available (typically in the form of property or other fixed assets), where the banks can offer an Asset Backed Lending product on a Loan- To-Value basis, secured against the assets as collateral.

Cashflow loans

The market for cashflow loans, or loans that are not secured against any physical security, are typically provided by speciality lenders and debt funds that are mandated to focus on SME businesses. While access to financing is easier with these types of institutions, they do typically come with a higher cost of capital when compared to the high street banks. Businesses looking for cashflow lending will also need to show a solid history of trading and positive financial performance to meet the underwriting criteria of the lenders.

In May, the Bank of England maintained a 5.25% interest rate – the highest level in 16 years. However, as the year progresses and inflation decreases, it is anticipated that there will be reductions and the cost of raising debt finance will see improvements.

View the full report.

For information and advice about funding business growth and how you could mitigate the impact of inflation, please call 0808 144 5575 or email

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