Published by Wanda Rich
Posted on December 8, 2025
7 min readLast updated: January 19, 2026
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Cash flow is often described as the engine that keeps a business moving, yet new research from
Cash flow is often described as the engine that keeps a business moving, yet new research from Novuna Business Cash Flow - specialists in SME and corporate cash flow finance - shows that many leaders are unclear on what it really means. A survey of 1,000 SME decision makers found that a third were unable to correctly define cash flow, even though the majority said they had faced cash flow problems within their business.
The findings come at a time when the Autumn Budget has set out a cautious economic outlook for UK companies, adding further pressure to the already challenging environment in which many SMEs are operating. This gap between knowledge and day-to-day experience highlights the scale of the challenge for UK SMEs. It also underlines the importance of providing not only financial support, but also the guidance and tools that enable businesses to navigate periods of pressure with confidence.
The study revealed that 82% of SMEs have encountered cash flow difficulties, with late customer payments (36%) and seasonal shifts in sales (35%) the most common triggers. Broader economic uncertainty was also a factor, with more than a quarter (27%) citing unexpected changes in trading conditions as a cause of disruption.
Small and medium-sized firms were the most likely to report difficulties (91% and 90% respectively), followed by micro businesses (84%). Even among sole traders, two-thirds (68%) had been affected. On average, SMEs said they experienced cash flow issues 7.4 times a year, with medium-sized firms almost reaching ten separate instances annually. Yet more than half of SMEs (55%) still rely on short-term fixes - most commonly cutting costs, taking out loans or borrowing from friends and family - while only a minority turn to longer-term options such as invoice finance (11%) or outsourced credit control (5%).
The research also explored how decision makers respond when disruption occurs. A third (33%) said they feel confident in managing issues when they arise, while more than a quarter (28%) said cash flow pressures motivate them to strengthen their financial planning.
But for others, the strain is significant. Almost a quarter (24%) admitted to feeling stressed or anxious about meeting financial obligations, while one in five (19%) said cash flow worries left them uncertain about the future of their business.
According to government figures, the UK is home to 5.5 million private sector businesses, 99.8% of which are SMEs. If the survey results are applied nationally, that would mean almost two million SME leaders across the country may not fully understand what cash flow is - despite most of them experiencing problems several times a year.
This rising pressure is also reflected in online behaviour. Search trend data from Google shows that searches for “small business cash flow management” have risen by 80% year-on-year, highlighting the growing number of SMEs seeking guidance on how to manage cash flow more effectively. The survey also found that one in five SMEs (18%) look online for advice when facing cash flow pressures - reinforcing the shift towards digital information-seeking.
Beyond the findings, this research highlights a wider truth: cash flow remains one of the most pressing issues facing UK SMEs, yet it is still often misunderstood or underestimated. By shining a light on both the knowledge gap and the frequency of disruption, Novuna Business Cash Flow hopes to encourage business leaders to plan more effectively. As SMEs continue to drive growth across the UK economy, giving them the tools and confidence to manage cash flow will be vital in building resilience and seizing future opportunities.
For more information, contact Nomada Digital
Kev Gall - 07441346319 / kev@nomadadigital.co.uk
Notes to Editors
About Novuna
Novuna is a trading style of Mitsubishi HC Capital UK PLC, one of the UK’s leading financial services companies, authorised and regulated by the Financial Conduct Authority (FCA) and the Official Finance Partner for British Athletics and Title Partner of UK Athletics and the Great Britain & Northern Ireland athletics team.
With over 2,300 employees, £8.6bn of net earning assets and over 1.3 million customers we provide innovative finance solutions that helps businesses and individuals find the financial edge that turns ambition into achievement.Our business divisions include Novuna Consumer Finance, Novuna Vehicle Solutions, Novuna Business Finance, Novuna Business Cash Flow and our European division specialising in Vendor Finance.
About Novuna Business Cash Flow
Novuna Business Cash Flow provides cash flow finance solutions to businesses of all sizes across a wide range of sectors in the UK, enabling SMEs and corporates to find the right cash flow solution to grow their business.
With remote digital on-boarding through FLi, its unique platform, a flexible approach to contracts, and fast payout Novuna Business Cash Flow won Innovation in the SME Finance Sector at the 2024 Business Moneyfacts Awards. Combining innovative cashflow solutions with industry leading technology, the business retains one of the highest customer satisfaction scores in the market.
Novuna Business Cash Flow is a trading style of Mitsubishi HC Capital UK PLC, part of Mitsubishi HC Capital Inc., one of the world’s largest and most diversified financial groups, with over 11trn yen (£57bn) of assets.
Cash flow refers to the total amount of money being transferred into and out of a business. It is crucial for maintaining operations and ensuring that a company can meet its financial obligations.
Cash flow problems occur when a business does not have enough cash on hand to meet its short-term liabilities. This can be caused by late payments from customers, unexpected expenses, or seasonal sales fluctuations.
Invoice finance is a financial solution that allows businesses to borrow money against the amounts due from customers. It helps improve cash flow by providing immediate access to funds tied up in unpaid invoices.
Outsourced credit control involves hiring an external company to manage the collection of payments from customers. This can help businesses improve cash flow and reduce the time spent on chasing payments.
A sole trader is an individual who owns and operates a business alone. They are personally responsible for all aspects of the business, including debts and liabilities.
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