2011 has already proven a difficult year for many businesses requiring business loans. Banks and other lenders have tightened their credit criteria and enhanced the levels of security supporting business loan facilities. In the first quarter of 2011 we saw the results of Project Merlin fall short by £25m per day. This is the governments’ effort to make the banks provide business loans and business funding. Not surprisingly, the lack of funding availability for business loans is leaving many business owners in a difficult position.
To make a bad situation worse, business loan availability may still fall short of the necessary provisions to boost the economy throughout 2012 as well. It has been muted that money supply will shrink going into 2012, this will leave all borrowing facilities, including business loan facilities, short of what the economy will demand and potentially nowhere near the levels required for growth.
We all know business loans are not the only form of business funding, however, at a time when business overdrafts are being consolidated into business loans due to the risk strategies of the major banks and cash flow is needed to help companies fight the effects of inflation, business loans are becoming an ever more important mechanism in the financial structure of businesses.
There are alternatives to traditional bank and third party business loans, business loans which can in some instances provide financial independence from the banks and other third party lenders. For more information, please contact us.