How SME retailers can improve cashflow and invest in growth
Late payments see 38 SMEs closing every day, the UK government recently reported.
Liquidity is a top concern for smaller retailers, with Capify’s recent Business Confidence Report finding that 61% of SMEs rated their cashflow position as concerning, and just 3% describing it as very healthy.
Cashflow concerns are central to SME growth on a national scale. Poor payment practices to SMEs cost the UK economy £11 billion annually, according to the government[1]. New action is being taken, with the Commercial Payments Bill being introduced in May this year, the most significant legislation on late payments in over 25 years.
Smaller retailers and other SMEs are looking for ways to grow. Stock will always require investment, and businesses are also looking to spend on marketing and staff. More than a quarter want to invest in AI technologies to help with everything from analysing sales and managing staff to ensuring shelves stay full.
However, in Capify’s survey almost half of businesses said economic uncertainty is holding them back from investing, while 39% said access to finance is stifling their growth.
Retailers must also contend with rising operating costs. The British Retail Consortium estimates that retail employment costs increased by more than £5 billion during 2025, adding further pressure to margins and working capital requirements. For smaller businesses, these additional costs can quickly affect cashflow, even when sales remain healthy.
This combination of pressures – rising costs, cautious lending conditions and the need to keep investing – means many retailers are having to make difficult decisions about where to focus limited resources.
Getting the balance right between funding day-to-day operations and investing in future growth is rarely straightforward. That’s why Capify has produced its Retail Growth (link) Blueprint 2026 — a practical guide to help retailers:
- Identify and manage trading pressures
- Make the most of new opportunities
- Invest in stock and premises
- Maintain healthy cashflow
Each section includes checklists and scorecards, making it a hands-on tool for identifying and acting on the areas that could have the biggest impact on your business.
Capify has been providing flexible finance to UK businesses since 2008. The Blueprint includes guidance on using funding strategically, plus ways to drive growth and improve cashflow without needing additional investment.
Download the free Capify Retail Growth Blueprint 2026
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[1] https://www.gov.uk/government/publications/commercial-payments-bill-factsheets/commercial-payments-bill-overview
