Banks put the squeeze on SME owners
Apr 02 2008
Businesses in the UK are struggling to avoid liquidation and company directors face bankruptcy as banks tighten their grip on business loans, according to Mark West of London-based Berley Chartered Accountants.
Unsecured borrowing is becoming increasing difficult to obtain, so directors are being faced with the dilemma of pledging their personal assets or risking their business collapsing.
‘The credit squeeze has given lenders the opportunity to compel SME’s and specifically the directors, to provide personal guarantees to secure the corporate borrowings of their business, clearly at a time they need the most help. Higher costs, a slowdown in the economy and rising inflation is causing more companies to suffer, with cash flow the most critical factor in their survival,’ adds West.
West believes that the credit squeeze will continue to threaten the existence of businesses and is unlikely to abate in the foreseeable future.
As a result, Berley have set up a free support line to provide advice and assistance to directors. Call 0800 458 1894.
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