Whenever it rains the banks want their umbrellas back

 

Despite previous rhetoric it is now apparent that some banks are still trying to increase their reserves, rather than lend more money out.

 

New figures from the banks themselves confirm that lending to businesses is continuing to fall.

 

Lending from the UK Government Enterprise Finance Guarantee scheme has dropped to record £66 million low in the first quarter of 2013. The EFG scheme was introduced in 2009 to assist SMEs to obtain loans.

 

As the Banks continue to labour under the weight of their previous errors the knock on effects are percolating down through the economy.

 

Prior to the credit crunch it was not uncommon for companies to use loans or overdrafts to settle VAT and tax bills but these companies are finding it hard to do so in the present climate.

 

With both new and additional funding hard to access – now is the time to take a long hard look at your Company’s financial situation.

 

Any approach to your Bankers could be very uncomfortable in the current climate so it is necessary to demonstrate you have full control of your exposure. Make sure that the Debtors book makes for healthy reading and that inventory control and stock turn are being monitored very closely.

 

Ironically it is the activities of Banks themselves who precipitated the ongoing crisis but that will not prevent them from playing hard ball with anyone trying to seek support for additional funding in the current climate.