Credit Freeze

Credit Freeze
Posted on January 01, 2009 |

Just as winter starts, the crunch turns to a freeze, how appropiate. Hear is the news that many people are unaware of, M4 Money ( Private Sector Money) fell to 3.5% year on year in October compared to an average of 9% over the last three years. This is the latest data from the Bank of England.


So what does this mean to you and me? It is very simple, we are now in the grip of a credit freeze. A credit freeze is where the banks or lending institutions show a great reluctance to either renew a credit line or overdraft or reduce the amounts and terms in which they are prepared to offer to you or to your customers. With the banks controlling about 90% of the small business lending market, either through overdrafts, loans or leasing; when they revert to type and cut back as they always do in a recession, it effects all the small business’s in a disproportionate way.


Cash flow begins to take a new priority. As more and more of your customers take longer and longer to pay, you are in effect funding their cash flow, and damaging your own. Their is a solution to both parts of the credit freeze. With banks in their current frame of mind of retrenchment, they appear very reluctant to offer new loans or increase overdrafts. This is effecting any equipment reseller.


However if the reseller used equipment leasing, it gives the customer a new credit line and helps in closing the sale. The other main benefit of leasing in a credit freeze is that you will get paid normally by BACS or TT within 24 hours, so the money is in your bank, and not in someone elses, assisting your cash flow.


So the ball is firmly in your court, to help overcome the credit freeze, use leasing, preferable Oak Leasing ! The UK’s most popular leasing company website.