6th March 2018
Commodity Cashflow Concerns: Short term finance solutions to a long term waste management problem
With globalisation of businesses, growing consumerism, and ever-increasing levels of plastic waste, the UK turned to China for help in supporting our recycling and waste management infrastructure. For years, the UK recycling industry has shipped tonnes of recyclable plastics to China, as the Chinese government accepted waste plastic to help reduce manufacturing costs. However, the Chinese are now finding themselves overwhelmed with recycling waste from other countries all over the world, and have taken action to prevent their environmental situation worsening.
With the announcement that China have now placed a ban on imports of recyclable waste into the country, UK waste management businesses are left facing multiple obstacles that will have a real impact on cash-flow and finances. Traded as a commodity, being unable to dispose of collected plastics presents real challenges until recycling companies can identify new partnerships with other countries to accept recyclable waste from the UK.
With insufficient resources to process our own recycling materials, combined with competition for new global markets, waste management companies face increased costs to store and sort growing mountains of plastic with no immediate source of income available. Smaller operators are also placed in a vulnerable situation, as insurance companies are becoming less likely to provide insurance protection to them.
For businesses experiencing financial strain during this time, asset finance may be a viable short-term option to release the value in owned assets such machinery, vehicles, or buildings. Asset finance can ensure cash flow obligations like payroll are met or can help to increase the opportunities for business growth in order to compensate for any downturn related to the waste management crisis.
The waste management industry needs to prepare for a financial pinch in the months ahead, due to these changes to commercial relationships involving the export of recyclable waste. If you’re concerned about cash-flow or have been looked over for loans, speak to one of our expert team at Davenham Asset Finance on 0161 832 8484. Find out whether asset finance is the solution for managing your cash-flow problems as a short-term solution.
With the announcement that China have now placed a ban on imports of recyclable waste into the country, UK waste management businesses are left facing multiple obstacles that will have a real impact on cash-flow and finances. Traded as a commodity, being unable to dispose of collected plastics presents real challenges until recycling companies can identify new partnerships with other countries to accept recyclable waste from the UK.
With insufficient resources to process our own recycling materials, combined with competition for new global markets, waste management companies face increased costs to store and sort growing mountains of plastic with no immediate source of income available. Smaller operators are also placed in a vulnerable situation, as insurance companies are becoming less likely to provide insurance protection to them.
For businesses experiencing financial strain during this time, asset finance may be a viable short-term option to release the value in owned assets such machinery, vehicles, or buildings. Asset finance can ensure cash flow obligations like payroll are met or can help to increase the opportunities for business growth in order to compensate for any downturn related to the waste management crisis.
The waste management industry needs to prepare for a financial pinch in the months ahead, due to these changes to commercial relationships involving the export of recyclable waste. If you’re concerned about cash-flow or have been looked over for loans, speak to one of our expert team at Davenham Asset Finance on 0161 832 8484. Find out whether asset finance is the solution for managing your cash-flow problems as a short-term solution.