Where is the finance Alistair Darling keeps talking about?

Alan in Cashflow news & advice | No Comments

One in five UK accountants have confirmed that their clients have been refused credit or had funding restrictions imposed in the light of the credit crunch. The findings, from a recent survey conducted by Venture Finance, provide the first real evidence that UK SME’s are feeling the effects of the well-documented economic downturn.

A quarter of the accountants surveyed believe their clients are more nervous about investing in their business. Forecasts are now showing that the number of business failures is expected to increase by 18 per cent by the end of 2009 so it comes as no surprise that many SME’s are feeling vulnerable. The promised easing of bank finance to businesses promised by the chancellor seems to have evaporated.

In the light of this changed economic climate, businesses need to find alternative ways of stabilising cashflow and sustaining working capital. While cost cutting is one way that many businesses are responding to the credit crunch, alternative forms of finance are available to provide security and ongoing business support.

As most lenders have tightened their funding lines it is important for SME’s to recognise that they have other options. Oliver Keech an Invoice Finance Partner at Clydesdale Bank said “Always thinking about an integrated relationship and understanding the ever changing requirements facing SME’s, it’s important to maintain regular contact with members and continue to provide flexible finance packages, providing security in these insecure times.”

TIP Eligibility for Invoice Finance can be an issue and it is important that companies remain on top of their cash flow as this is essential to their continued financial health and acceptability to funders.