Overcoming the Credit Freeze

Overcoming the Credit Freeze
Posted on January 01, 2009 |

We always expect January to be a cold month, as the winds from the North sweep down the country. This year it is not so much as the icy weather, but the increasing credit freeze hits all types of businesses, with no sign of a thaw insight. According to the accountants Deloitte’s this morning, 99% of finance directors that they asked, rated credit as hard to obtain. It is this creditfreeze that is driving the recession.There will be no recovery until the credit tap is turned on again.


Accessing credit is now the major worry for most companies. And if you can find credit, the pricing has increased sharply, and its terms are far harsher than they were a year ago. With banks now having a reduced capacity for lending, coupled with a growing fear of rising bad debts, which appears to be justified, the credit freeze has only just started.


So what does the future hold for us all? Well I think that cash flow management will prove to be crucial in the coming months. With companies experiencing growing bad debt on their invoices, and every bad or doubtful debt hitting the bottom line, companies will turn to either factoring or invoice discounting. Both of these options will cost you money. There is a third way, that will not cost you a penny.


If you lead with a lease rental figure on every quote, and lead with a leasing figure in every closing conversation, your leasing penetration will increase, and as you are aware, the leasing companies will normally pay you by either TT or Bacs within 2- 3 days, saving you worrying about the outstanding invoices. In every recession that we have been through in the last 35 years,equipment leasing has always increased, as the suppliers need it for their cash flow, and the customers require it as a new credit line. So it is a win- win situation for both suppliers and customers.


For more information, just visit the UK’s most popular leasing company website at http://www.oaklease.co.uk/.