The continuing stagnation in the UK economy has prompted the Bank of
England to launch two new stimulus packages.
The Banks latest plan came in response to the worsening economic
outlook, governor Sir Mervyn King said.
Together with the government, it will provide billions of pounds of
cheap credit to banks to lend to companies.
It is the small/medium companies (SME’s) who have been most impacted by
the reluctance of Banks to lend. During the last 18 months there has been
acceleration in the number of companies going into administration and or
bankrupt.
Despite the intentions of the Bank/UK government to free up lending it
will require a sea change in the banking community’s attitude if they are to
provide funding.
Fearful of more harm being done to their own balance sheets from the
unending crisis in the Eurozone it is hard to imagine the Banks taking other
than a hard line attitude towards companies seeking additional lines of credit.
Any approach must be accompanied by a clearly defined strategy for
growth together with a credible assessment of current liabilities. This is a
time when recalcitrant Debtors and slow moving Stock are luxuries that no
organisation can afford.
No comments:
Post a Comment