KELLY Green, regional director for Lloyds Bank Commercial Banking in the North-East, explains how businesses can manage their working capital to meet seasonal demand.

The allure of Valentine’s Day is on the rise. According to Statistica, the amount spent on the ‘day of love’ has increased by 25 per cent in the last five years – overtaking Easter as the leading calendar date in the first half of the year.

Many lovebirds will celebrate the day by exchanging lavish gifts and enjoying expensive meals out. While a strain on customer purse strings, it’s also a prime opportunity for retailers and hospitality businesses to cash in on.

They can only do this if they are prepared for the spike in demand. Thankfully, there are a few things businesses can do to ensure they’re not left broken-hearted.

A first step for businesses would be to focus on cashflow and working capital to ensure their finances are fighting fit.

Our latest Working Capital Index found that businesses across the North of England have a total of £65 billion tied up in excess working capital – money that could be released and used when it’s needed most.

Having sufficient working capital is essential as it means that business owners can invest in their company without running the risk of overtrading.

Extra staff and stock may also be required to match demand, so having cash on hand to cover costs is vital.

In the short-term, financial products including arranged overdrafts, business credit cards or invoice and asset finance can help tackle pressure points.

But if it’s a long-term solution that’s needed, asset-based lending can help to protect working capital by unlocking the value tied up in stock or property. It can provide access to money that may have already been invested in the business.

For many new and smaller SMEs, understanding and forecasting how working capital will ebb and flow can be daunting.

We work by the side of businesses to help them assess their chances of over- or under-trading and seize February 14 with confidence.

As part of our commitment to helping Britain prosper, Lloyds Bank has pledged to provide £700 million to firms across the North-East this year.

Understanding cashflow requirements could lead to greater financial reward, ensuring that the loving feeling lasts well beyond Valentine’s Day.