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Brian Burns on the Credit Crunch and Small Business

Well if it was up to the media we may as well all pack up and go home; there is no business out there, interest rate cuts are not being passed on, and all our homes are going to be worth nothing with a return to the negative equity crisis of the late 90s. Certainly the banks seam to have tightened up their lending criteria for small businesses but this is nothing new and the media hype has given them a good excuse not to lend to riskier clients and we may even have a return of the situations we saw in the late 90s when some banks were sending in consultants to perfectly good clients who were in overdraft. The consultants then provided a report suggesting the bank remove the facility as soon as possible which caused a great many profitable (although cash flow negative) businesses to go bust. Many of the consultants were also insolvency practitioners as well, so who better to handle the liquidation and get a double whammy for firstly providing the consultancy then the liquidation fees. A lot of accountants made a lot of money and a lot of good businesses went bust, needlessly. Lets hope this doesn't happen again but it is now more prudent than ever for businesses to spread their lending and not get too deep in with the bank. Remember if you owe the bank £100,000 you have a problem, if you owe them £1 million the bank has a problem and if you owe £100 million the country has a problem. So if you are a small business, spread your credit and use unsecured financing as much as possible even if the rate is slightly higher - it could save you in the long run.

If anything the "Credit Crunch" has had a positive effect on business at Technology Leasing; with many household name lenders turning away perfectly good business, we are ideally placed to offer an alternative source of finance from our portfolio of lenders. Also for our supplier partners the benefits of offering your equipment on a pay as you use and benefit basis, as opposed to the large cash outlay will make it a lot easier for clients to get the new technology they need now, rather than having to wait or compromise. Needless to say the cash flow benefits for suppliers of being paid immediately on a lease deal are more crucial than ever at the moment.

For any business established before the late 90s then we have seen all this before; the bottom line is that although spending will slow down, at the end of the day, life continues and that means that despite what the media try to tell you, business will also continue. With that in mind now is a great time to check out the facilities available at Technology Leasing Limited, Whether you are a new business or have been established many years; if you are a supplier in need of a finance facility for your clients we'll be delighted to hear from you.

Regards,

Brian Burns
CEO and Chairman
Technology Leasing Ltd.

P. S. Due to the credit crunch we are getting more calls than ever from clients and suppliers who are being let down by their current lenders. If lines are engaged when you call please be patient.