As we have probably all heard, the Bank of England has cut base rates to 3%, thats a 1.5% cut. But how will the interest rates help our businesses?
Whilst Forklift Agency has survived the "Credit Crunch," many hundreds of businesses have gone bust. Out of our customers we have had 5 go into administration and after reading through the administrators reports these companies are broke big style.
At the back end of one of the reports, it lists all of the companies that the main company owes money to, and our small amount looks tiny compared with some of the biggies and you can see why banks are struggling. One company had next to no assets, and owed the bank £3 million for their overdraft, and thats one company.
We recently credit checked a well known business. Despite the high number of recent CCJ's, the system would have allowed us to give this company a credit facility of £5 million pound. I suppose you would think that this would be a safe company, but looking through the accounts this company made £30 million pound between 2005 and 2006, £40 million between 2006 to 2007, but then lost £45 million between 2007 and 2008. As you can imagine, we were wary about giving this company credit yet even before we had sent confirmation of the account, the money was actually in our bank.
I believe a lot of the "Credit Crunch" has been hyped up, very much like the Russell Brand and Jonathan Ross scandal that hit the papers not so long ago. Our turnover and profit hasn't really increased over the last year, but luckily stayed on an even keel, yet the type of business we have been doing has changed.
It would be good to hear from other businesses to see how they have been doing as I don't believe everything we read in the papers. Please send us an email to blog-feedback@forkliftagencygroup.co.uk
