Credit freeze thaw
FIRMS are still struggling to raise finance but market conditions are easing slightly, the CBI business group said today.
Its latest survey showed a net 20% of firms finding it more difficult to raise new funds in the three months to May - an improvement on the 36% reporting difficulties in March.
The findings will raise hopes that the credit freeze is beginning to show some signs of thawing.
Ian McCafferty, the CBI chief economic adviser, said: “Credit availability is still a concern, but the severity of the situation is easing compared with a few months ago.
“Big companies who were encountering serious problems getting credit at the start of the year are still finding it difficult, but they expect that the supply of existing credit will get slightly easier over the next few months.”
The CBI added there were still “significant” problems with gaining trade credit insurance, which covers suppliers against the risk of not being paid in the event of insolvency.
Its survey said a net 54% of firms were still struggling to gain the cover despite a £5bn Government-backed boost to the sector in April’s Budget.
A survey of 10,000 firms across the North-east revealed last week over three in five SMEs had no protection against customers defaulting.
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