As part
of a
small
business
you are
probably
aware of
just how
important
funding
is in
getting
an idea
off the
ground,
and to
help
fund
expansion.
Sadly
the
credit
squeeze
means
that
funding
is
becoming
harder
and
harder
for many
businesses
to
obtain;
and many
entrepreneurs
are now
paying
higher
costs,
higher
rates
and
needing
more
security
than in
previous
years.
In a time of financial uncertainty, more
business owners are resorting to risking
their home as security in order to get a
business loan they would have previously
been accepted for with significantly less
security. This is even more of a problem
with house prices potentially stalling or
even falling over the coming months; putting
business owners under even more financial
pressure.
“Businesses in the UK are struggling to
avoid liquidation and company directors face
bankruptcy as banks tighten their grip on
business loans,” states Mark West of Berley
Chartered Accountants.
“The credit squeeze has given lenders the
opportunity to compel SME’s and specifically
the directors, to provide personal
guarantees to secure the corporate
borrowings of their business, clearly at a
time they need the most help. Higher costs,
a slow down in the economy and rising
inflation is causing more companies to
suffer, with cash flow the most critical
factor in their survival. Although the issue
has become topical in the last few months,
the underlying problems have been here for
at least 2 years and only now is there
increased public awareness as individuals
struggle to cope” added Mark West”.
Unsecured borrowing is becoming increasing
difficult to obtain hence; directors are
being faced with the dilemma of pledging
their personal assets or risk their business
collapsing.
“This credit squeeze will continue to
threaten the existence of businesses and is
unlikely to abate in the foreseeable
future,” stated Mark West
If you are struggling to obtain finance, why
not see if our Business Finance service can
help you to obtain funding from a range of
business services?
