With early-year cash flow pressures still affecting businesses’ access to funding, Approved Business Finance is urging companies to address common mistakes that may be holding them back.
As operating costs continue to climb for businesses, many are being forced to rethink their short-term financial strategies, making early planning for 2026 more important than ever.
Recent figures show that UK venture funding surged to £6.8bn in Q3 2025 alone, underlining that while capital is available, businesses need strong financial fundamentals to access it successfully.
For businesses that fail to get cash flow right, the consequences can be severe, as research shows 82% of business failures are due to poor cash flow management.
However, many of these risks can be reduced through proactive planning and having clear visibility over cash flow across the board.
Advising on the cash flow mistakes to avoid, Mark Kozo, commercial director at Approved Business Finance, is sharing advice on how to improve cash flow management to help put businesses in a stronger position to secure access to funding.
-
Poor cash flow visibility
“Planning for 2026 can be a challenge for businesses amid ongoing uncertainty with the economy. However, it’s important to have the basics in place, such as a clear view of what’s coming in and out, at least over the next few months.
“Without this visibility, businesses can appear not to be in control of their finances, making them a higher risk to lenders.”
-
Late or inconsistent invoicing
“Delays in raising invoices or consistent payment chasing can create unnecessary cash gaps, which can raise concerns about a business’s reliability of income.
“Having a robust internal system for managing invoices, such as setting deadlines and regular follow-ups, can help to prevent cash flow gaps before they arise.”
-
Over-reliance on short-term fixes
“Access to funding is going to be difficult for businesses regularly using overdrafts instead of having a structured cash flow in place.
“Relying on these short-term fixes can signal ongoing cash pressure to lenders, making it harder for those wanting to secure additional finance.”
-
Not accounting for seasonal cash flow swings
“Many businesses fail to factor in seasonal peaks and troughs when forecasting cash flow, which can impact the ability to meet commitments. These can be quickly identified during funding assessments, making it harder for businesses to demonstrate long-term financial control.
“Businesses can mitigate this risk by planning for seasonal variations in advance and adjusting forecasts to reflect realistic trading patterns.”
-
Overestimating growth
“Expanding on peaks and troughs, it’s equally important not to overestimate growth for the year. Projected income is just that – a projection, not guaranteed.
“If the balance sheet presents an overly optimistic picture, lenders will quickly identify gaps between projections and reality. Keep a balanced approach to forecasting by basing projections on realistic assumptions and guaranteed commitments.”
Mark Kozo, commercial director at Approved Business Finance, said: “As businesses start thinking ahead for 2026, now is the time to move away from reactive cash flow management and focus on longer-term planning.
“Having a clear, structured view of cash flow not only reduces risk but also opens up far more funding options to support sustainable growth.
“Those that take control of cash flow now will be best placed to access funding and support sustainable growth in the years ahead.”