As this paper highlights the Banks lending ratios have dropped considerably, making it extremely difficult to gain the overdraft or essential loan facility.
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Evaluation of the company’s Credit Control function and assessment of the Policies and Procedures that are in line with the company’s overall objectives.
What does that mean in real terms?
If you were to require additional funds to launch a product or decide to use a factoring service or just want to insure the Debt book/Sales ledger, by having a strong credit function in place will increase the chances of success. The company will be in a stronger position to negotiate better terms as well as increasing the companies Cashflow.
Bank lending to small businesses in June was over a third lower than in the previous year, despite the British Bankers’ Association (BBA) claiming that its members were making loans of around £27m to small businesses every day.
More than 11,000 new loans were provided to small businesses in June, for a total value of £598m, according to figures out today. The longer working month meant that the number of loans were around £70m higher than in April and May.
But compared to last year the level of lending has dropped by 31 per cent when loans totalled £867m.
And so far this year the current monthly average for lending to small businesses is around half the amount banks lent two years ago. In 2008 around £991m a month was lent to small businesses, but this has now plummeted to a monthly average of £564m.
David Dooks, BBA statistics director, said: “On a daily average basis, banks are making available around £27mn of new term lending to small businesses each working day. Over the past twelve months, nearly £7bn of new, long-term lending has been provided.”
However, these figures were attacked by the Forum for Private Business who called the banks’ strategy of maintaining they were lending “distressing”.
A spokesman told Credit Today: “Contrary to what many of the banks have been saying these BBA numbers prove what our members have been saying for so long: that lending has decreased and it is decreasing markedly.”
He added: “It is distressing that the BBA is stressing in the first event the amount of money it is lending when the real story is the trend that shows