Businesses struggle to arrange finance

Date: 3rd September 2008

Accountants have reported that many of their small business clients are struggling to obtain credit.

Figures released by Venture Finance indicated that one in five accountants revealed their business clients 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."