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Businesses Struggle to Arrange Finance
Filed under FinanceNov 28Accountants and Mortgage Intermediaries have reported that a vast proportion of their small to medium business clients are struggling to obtain credit.
Figures released by Venture Finance indicated that one in four accountants revealed their small to medium sized business clients had been refused credit or had funding restrictions imposed as the credit crunch takes hold.
What’s more, the data showed that a quarter of the accountants think their business clients are now less keen to invest in their operations.
“As traditional lenders start to tighten their funding lines it is important for SMEs to recognise that they have other options,” Peter Ewen, the firm’s managing director, said.
Recently, the Institute of Chartered Accountants in England and Wales (ICAEW) said that its latest member survey revealed that businesses were feeling increasingly gloomy about the economy.
At the time, ICAEW executive director of operations and finance Robin Fieth said: “As an increased number of businesses express concern over late payment, effective cash flow management is now more essential than ever for those sectors with rising input costs.”
The reality is where business could often look to financial institutions to help assist with tax arrears this option has been taken away from many small businesses.
This often leads to a gap between what a business owes to HMRC and what the business has available to repay their crown debt.
The fact that such a high percentage of businesses are reporting the lack of credit available should serve to demonstrate the seriousness of the situation. A business which is unable to repay its Tax Liability is likely to be subjected to a vast variety of enforcement action by HMRC.