During March UK insolvency figures show that 2112 companies
went into liquidation. SME’s are finding it particularly hard to survive
against the current economic backdrop.
Funding as always is the main problem and the rejection of
applications for bank loans makes for stark reading – in the North East 46%
were turned down, West Midlands 47% and in the South West 41%.
With the marked reluctance of the Banks to lend, it becomes
imperative that all businesses focus on their areas of exposure – rigorous
policing of the Debtors book must be a priority and Stocks must be kept at a
minimum.
More companies will try and improve their cash-flow by
dragging their feet with payments and trying to put more of the burden of
carrying stock onto their suppliers.
Those that adopt a passive approach to these issues will
find themselves increasingly vulnerable and heading down a slippery slope.
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