This might be a useful option for recruitment companies, while they grapple with rising fuel, material and labour costs, interest rate rises and inflation at a 30-year high.

UK businesses are feeling the squeeze, as the economy emerges from the Covid-19 pandemic, and a Yorkshire online auction specialist along with other financial experts are offering suggestions to mitigate the crunch.

Over 1.6m businesses have received Coronavirus business loan schemes worth over £80bn since the start of the pandemic and an 87% increase has occurred in monthly searches for ‘business resilience’, according to BPI Auctions.

The firm recommends that businesses wanting to release capital and improve cashflow do the following:

1. Sell unused assets to release the capital
Most businesses will have unused assets on their premises they could turn into capital, but they simply get overlooked as they’re no longer used. Just because they’re not valuable to you, don’t underestimate their value to someone else. says Henry Spencer, sales director at BPI Auctions. However, a word of caution from Spencer: “Make sure you are clear on terms and costs before agreeing to any sale. Work with transparent and cost-competitive outlets offering options to sell from your site with no fees on unsold goods. You can quickly eat away at any sale return if you get lumped with costs you didn’t expect.”

2. Find the right borrowing deal for your business
If you don’t have any assets to sell, you might want to look at leveraging assets you have capital tied up in. Alex Beardsley, joint MD of ABL Finance, says: “Asset finance is where a lender agrees to extend a loan in return for taking security over some of your company’s assets. The financing might be based on a single asset or a whole series of assets, like a fleet of company vehicles. It is suitable for a wide range of both new and used assets, including equipment, machinery and vehicles, and adverse credit isn’t usually a problem.”

3. Look at alternative channels to turn surplus stock into new revenue streams
Over the last two years, businesses have been affected by multiple lockdowns, Brexit, and most recently, Russia’s agenda, disrupting global supply chains with long delays and shortages. Alongside the increase in storage costs, many SMEs have sought new channels such as one-off or repeat auction sales to turn surplus items including office supplies into working capital.

4. Approach an alternative lender directly
If your bank has rejected your application for any further borrowing facilities, it doesn’t mean it’s the end of the road. Gemma Wright, regional MD at Reward Finance, says: “The lending landscape for SMEs has changed beyond recognition over recent years and many businesses still don’t appreciate that there is a whole market outside the more mainstream banks.

“Business owners need both clarity and confidence from their funders, and this is where the alternative lenders set themselves apart. Arguably what SMEs need, right now, is certainty of delivery. Alternative lenders take the time to understand a business, meet the owners and talk to them about their plans and aspirations. Lending decisions are made by experienced lenders, applying common sense and innovative thinking, not computers and algorithms.”

5. Health check your business first before selling assets
Before you sell any assets or commit to further borrowing, experts advise to make sure it’s the right thing for you and your business moving forward. “Business owners are programmed to fight for their companies, but sometimes taking on debt or releasing the capital left in assets might not be the best move,” says Rob Adamson, partner at Armstrong Watson and a licensed insolvency practitioner.

“If a business is operating under too much pressure, there may be other underlying issues that more cash won’t resolve and could even worsen. Even if it's hard to accept, a different perspective could help you see the longer-term benefits of selling or even deciding to close your business.”

• Comment below on this story. Or let us know what you think by emailing us at [email protected] or tweet us to tell us your thoughts or share this story with a friend.