As Bank of England governor Mervyn King, pledged to pump more cash into the money markets in an effort to restore confidence in the UK's financial system, fears were being expressed across the business community that the knock-on effect of the credit squeeze and higher inter-bank lending rates will lead to serious problems for smaller businesses later in the year.
"With increasing pressure on their own profits, banks have been hastily withdrawing fixed rate mortgage offers in the consumer market and raising personal loan rates. It is inevitable that they will also become much more reluctant to lend a hand to small businesses that are struggling with their cashflow", says Dennis Scott, Commercial Director of e-bcm. He believes that this will force many more SMEs to seek loans at cripplingly high rates of interest or simply fall by the wayside. "There are already signs that many small business people are choosing the latter as a preferable option to trying to fight what many see as an increasingly futile uphill battle."
A recent report from web site moneyweek.com noted that it has been estimated by Barclays that some 500,000 businesses - 17 percent of all businesses with bank accounts - closed down in 2007. This represents the highest level of closures since last recession in the early 1990s. According to Scott, the figure is likely to be significantly higher in 2008 as a result of the current global credit crisis.
"The current crisis is seismic and is shaking the financial market to its core. As many commentators have already noted, the full effects are yet to be felt in the consumer market but when the Tsunami comes it will also have a major impact on the small business market. The message for SMEs is pretty clear - act now and you will save yourself a lot of trouble, toil and strife later on."
e-bcm expect the pressure on small businesses will mount throughout the year, says Scott. "As the banks tighten their belts, smaller firms will find it harder to get paid. To survive, they may then be forced to seek re-financing or to take out loans at crippling interest rates. Businesses that want to avoid running into problems need to reduce their own level exposure without delay."
This will mean calling in longer-term debts and taking a more stringent line with regards to extending credit. "Like the banks, small businesses are going to be forced to get tougher and tighten up on who they do business with and on what terms", says Scott.
The e-bcm on-line service enables small businesses to carry out credit checks and chase in debts in a simple, affordable way. For as little asGBP2.49 a month, subscribers can access information on current and prospective customers. The system provides simple credit scoring to give you an instant perspective on the level of risk with new customers and enables you to run Comprehensive Company Reports from as little as GBP1.99 each.
When bills remain unpaid for an unacceptable amount of time, subscribers can use the system to automate the process of chasing in the debts. Registered users can generate a Final Demand Letter to request payment and, if the bill remains unpaid pass it on to a professional collection agency on a no-win no-fee basis. All of this can be done on-line, through an easy-to-use interface, quickly and without paying substantial subscription or license fees.
About e-bcm
e-Business Credit Manager Limited (e-bcm)is an end-to-end, credit and debt management service designed to help small businesses make use of professional financial resources to reduce risk, minimise late payments, avoid bad debt and improve cash flow. The aim of the service is to make it easier for the UK's estimated four million small businesses to more efficiently manage their credit granting and collection routines.
The company's management team has over 60 years of combined experience working with small businesses in the IT, telecommunications, construction and agricultural industries.
Chairman and CFO of e-bcm, Vic Jackson, an accountant and Member of the Institute of Credit Management, spent his main career with J I CASE, the major US Construction and Agricultural Equipment manufacturer. Jackson was UK Finance Director and Managing Director of Case Credit Limited, Case's in-house finance subsidiary, before taking on the role of Director for Treasury and Credit for the whole of Europe.
Managing Director of e-bcm, John Carter, is also the founder and Managing Director of Direct Market Services Limited (DMSL), the leading distribution partner for British Telecommunications plc. (BT). He previously worked as a business consultant and in senior positions with Brother UK.
Commercial Director of e-bcm is Dennis Scott. In a 17-year career at BT, Scott held a number of senior management positions and was most recently General Manager of Distribution Sales at BT Business Indirect Channels. He left BT in March 2006.
CONTACT: Dennis Scott Tel: +44 (0)7860 567940 e-mail: dennis.scott@e-bcm.co.uk WWW: http://www.e-bcm.co.uk Neville Street Stella Six, Press & PR Tel: +44 (0)1743 246917 Tel: +44 (0)7967 717259 Fax: +44 (0)1743 291816 e-mail: nev@stellasix.com WWW: http://www.stellasix.com WWW: http://www.shropshiredramacompany.co.uk
M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
|
|
