paying customers

Bank Borrowing

Cashflow problems increase bank borrowing

Late–paying customers are forcing small firms to increase their bank borrowing to maintain cashflow, according to the Federation of Small Businesses (FSB). Commenting on figures from the British Bankers’ Association (BBA) which revealed that bank lending to small firms (those turning over £1 million or less) increased by 11 per cent in the 12 months to June 2008, FSB public affairs spokesman Stephen Alambritis, said: “Businesses are not borrowing to expand, they are borrowing to keep still.” “We think lending is growing not because people are growing their businesses, but because small businesses are not being paid on time by the customers they supply. Businesses are having to go to the bank to pay their rent, rates and other bills — it is a worryi... »