Creative agencies are facing a cash flow crisis as nearly three quarters (72 per cent) of UK firms plan to freeze their marketing spend due to the pandemic, according to MarketFinance.
Research from the alternative business finance provider found that four out of five marketing businesses reported that revenues have fallen, on average, by 53 per cent since the onset of lockdown measures, compared to this time in 2019.
And 85 per cent of creative agencies indicated that they will run out of money by June.
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Despite their cash flow concerns, the government-backed coronavirus business interruption loan scheme (CBILS) only appealed to half (52 per cent) of firms surveyed.
The remaining half (48 per cent) are fearful they would not be successful for the scheme because they have existing business loans and servicing an additional debt would cripple them, MarketInvoice found.
Additional concerns over their cashflow and business models mean they are reluctant to apply.
“Agency bosses have been hit hard but they need to press on and put measures in place to ensure they survive this crisis,” said Anil Stocker, chief executive at MarketFinance.
“The coronavirus job retention scheme will help to protect talent, but they shouldn’t shy away from the CBILS. This scheme covers a range of finance options, not just business loans.
“We found that a third of creative agencies are unaware of invoice finance as means to remedy cash flow problems and three quarters of firms have never used it. Invoice finance is available under CBILS.”