One of the main disappointments of June’s ‘Emergency Budget’ was its failure to adequately address the issue which most small business and company formation owners face: the fact that access to finance from banks is severely restricted.
In the run up to the election campaign it was suggested that the government that eventually came into power should appoint a committee, the primary objective of which would be dealing with companies which had had their applications for additional finance rejected. However, this is yet to be established.
According to private equity firm ‘J.P Harnett’, higher administration charges on existing finance agreements and increase administration and rates on agreement renewals are causing many companies extreme cash flow problems.
Kay Barber, managing partner of J.P Harnett, comments: “The fact is, the economic downturn made most companies more aware of the importance of managing their finance. While the ‘Emergency Budget’ did include some concessions to small businesses and company formation, it failed to fully address the issues related to the lack of available finance.”