With businesses facing an unprecedented level of political uncertainty surrounding the General Election in recent weeks, many firms reduced their investment activity as a result of falling order books. 

However, the usual dip in sales around the time of the General Election should be no cause for concern. It is those businesses that act now to take advantage of the inevitable upturn post-election that will be rewarded in the long-term. 

Unsettled by the uncertainty of potential legislation changes, some firms have opted to delay investment decisions until after the election is concluded meaning that an inevitable upturn will occur in the months after the election. Businesses have two options available to take advantage of the more favourable post-election conditions; either invest, or maintain their position. 

John Atkinson, head of commercial business at Hitachi Capital Invoice Finance, said:

'Most businesses have little need to exercise caution. Any legislative changes that do occur as a result of the election will not come into force until next year at the earliest, which means by investing now they can take advantage of any potential change ahead. 

'After weeks of speculation surrounding the outcome of the election and numerous promises being made by each party, many firms seem to have adopted a ‘wait and see’ mentality. This suspension of financial investment is usually motivated by the fear of making important decisions. Businesses should consider using simple cash flow solutions to free up vital cash owed to them by current late or unpaid invoices.'

Reluctance to make financial commitments is likely to deplete contract opportunities and as a result, many SMEs are have experienced a slow-down in orders in recent weeks. In some cases, customers are delaying payments of invoices, adding pressure to the already stretched cash flow of small businesses.

John Atkinson added: 'Many smaller businesses rely on invoices being paid on time to cover their operating costs. They do not have large cash reserves and therefore it is crucial for the business to fill the order pipeline. The uncertainty in the general election has caused some businesses to pay late or hold off on projects altogether until the new government has been appointed. 

'A lack of investment in skills, as well as a potential fall in stock levels and failure to invest in new capital, such as machinery, vehicles and property could reduce the ability of a firm to capitalise on the inevitable increase in business activity after the election.

'Businesses affected by the recent political uncertainty could benefit from options such as invoice finance to cover overheads and maintain the company’s financial position during the slow-down. Invoice finance is often underestimated as an option to provide a boost to cash flow – allowing businesses to turn their unpaid invoices into available cash. Firms experiencing a dip in orders should take steps to gain the necessary funding required to ride out the storm.' 

Cautious investment activity could prove short-sighted and may reduce the future competitiveness of a business. During the period of protracted debate post-election, transport and logistics companies must work to protect cash flow and preserve trading activity in the face of depleted order-books.