The Bank of England has drawn attention yet again to the
difficulties of firms to obtain finance against the current economic backdrop.
In its latest dire assessment it cites that many companies (particularly SME’s)
are “unable to obtain credit at any cost”.
Long term funding is especially hard to secure requiring the
renegotiations of existing facilities with the accompanying charges. It is not
unusual that overdrafts are being reduced or even withdrawn with the subsequent
knock-on effect.
Latest figures for April show 1,564 companies failed with
SME’s hardest hit.
The Banks are still trying to repair their balance sheets at
the same time that the problems in the Eurozone take centre stage and against
this background they will not change their current operating procedures.
It is imperative that all Debtors are rigorously policed,
Stock holdings kept to a minimum and the utmost scrutiny is applied to all
elements of operating costs.
Expect some very inventive tactics from Debtors to delay
their payment obligations and the damage done to your own cash-flow should they
be allowed to do so.
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