The major UK banks and the BBA have established a Taskforce to identify, analyse and review ways the banking system can, over the next 3 years, help viable UK business of all size access appropriate finance and other support. The Taskforce will set in train a number of work streams and aims to report by mid October in time for the Chancellor’s autumn statement.

High street banks already provide the bulk of lending to UK businesses – their current lending stands at a total of £720bn to all UK businesses. This is despite being required to keep back more cash and capital and having to plug the lending gap left as overseas and specialist lenders largely stopped operating in the UK.

Banks are willing and able to lend to businesses where they can see how the money will be paid back and where firms have a viable business plan. Indeed banks lent a net £6.8 billion in June to businesses and, despite the recession, lending to smaller firms is stable and borrowing by larger firms has shown some improvement.

Angela Knight, chief executive of the British Bankers’ Association said:

Banks already provide the vast bulk of business funding in the UK. But how much they can lend depends on many factors including new rules dictating how much cash and capital has to set aside before banks can even consider lending to customers.

Banks are happy to lend to firms where their business plan is robust and BIS has acknowledged in today’s green paper that conditions have improved and that the majority of businesses can raise the finance they need. But lending to SMEs is not risk free. Businesses need to show they have enough coming in from the goods and services they provide to repay any borrowing. It is in no one’s interests to lend where customers would struggle to repay the loan and get into difficulties.

“The greatest help there can be for business is to restart the securitisation market and get wholesale markets moving so there is a steady stream of new funds which banks can convert into loans to business.

Today’s consultation on lending to small and medium sized enterprises reconsiders some old solutions to lending as well as considering some new ideas. The banking industry is currently setting up a number of groups to work though the government’s plans as well as to make our own positive proposals to helping finance small businesses.

UK banks have already agreed with government the following principles for dealing with SMEs.

Banks will:

• Welcome the support of the SME’s own professional advisers and are happy to work with them [acknowledging shadow directorship boundaries in the provision of advice];
• Set out the factors that determine how much the loan will cost using either in house guides or industry-standard literature;
• Inform customers how long it will take for a lending decision to be taken, starting from the point when a full suite of information is provided to complete an application;
• Ensure they have fair and effective processes in place to review decisions to decline a lending request;
• Provide proactive and clear feedback wherever possible when a decision has been taken to decline a borrowing request and will suggest possible next steps businesses might take [for example contacting Business Link for further advice and support]; and
• Promote both these initiatives and the Lending Code itself. with SME representatives and with the Lending Code Standards Board.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clickin here.

The Council of the European Union has officially adopted a new Invoicing Directive (10858/10 amending Directive 2006/112/EC) aimed at simplifying VAT invoice requirements, in particular electronic invoicing (e-invoicing). All EU Member State should now implement appropriate changes to its national VAT law in line with the changes set out in the new Directive by 2013, at the latest.

Marc Hoessels, indirect tax partner and head of the Deloitte e-invoicing group in Europe, comments: “This decision is a first step to reduce the “technological burden” regarding invoicing. Most companies are using a financial system which allows them to follow up on orders, transfers, invoices and finally on the payments, however, written proof was always required. We hope EU Member States will now draft a joint position paper where they elaborate a specific legislation on e-invoicing for their country with a view to applying this Directive very soon, preferably in advance of 2013.

“All financial systems can already store invoice documents in a secure way, so why not acknowledge this new technology is also secure for tax audits? In the UK and the Netherlands, for example, companies can already make arrangements with the tax authorities in order to ensure that they used all necessary procedures to ensure a correct tax return.”

In any case, it is necessary for the European Union to elaborate new instructions regarding archiving of the bookkeeping. Companies must be aware of the fact today the period of retention for e-documents is still 6 years in the UK (other Member States have differing retention requirements).

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clickin here.

British businesses have failed to return to pre-credit crunch levels according to new research, raising new questions over the UK’s economic recovery and concerns over the prospect of a new insolvency epidemic.

RSM Tenon’s Business Barometer found that 76% of entrepreneurs are still waiting for their business to return to the levels seen before the credit-crunch hit in 2007.

Three years on and one in ten entrepreneurs believe it will take another three years for their businesses to return to ‘normal’ levels. 27% predict it will take one to two years and 20% think two to three years is a more realistic timeframe for business levels to be restored.

The wobbly recovery is likely to threaten entrepreneurs’ plans as a double dip recession could re-infect businesses causing another epidemic of insolvencies. RSM Tenon believes there is likely to be more than 20,000 business failures this year.

The research, which questioned more than 300 entrepreneurs throughout the UK, also found the risk of a double dip recession has sparked 43% of entrepreneurs to review their business.

Entrepreneurs are still suffering despite the recession officially coming to an end – 22% see a lack of cashflow as a serious threat to their business over the next 12 months.

Carl Jackson, Head of Recovery of RSM Tenon, said:

“There has been little progress down the road to recovery and many entrepreneurs remain skeptical that they will see any meaningful revival in the near future.

“The problems caused by the credit crunch have continued to linger and show no signs of disappearing. Margins remain tight for businesses, with many owners still unable to secure the additional funding they need. Further failures are inevitable in this climate and we can expect to see 2010 corporate insolvency levels match the record totals that we have seen in the last two years.”

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clickin here.

During the first half of 2010 almost one in ten (9.4%) of UK mergers and acquisitions involved distressed businesses. Of the 1491 deals completed in the UK, 141 involved companies acquired out of administration or other formal insolvency procedure, according to research by Experian Corpfin on behalf of insolvency trade body R3. The total value of all distressed deals in the first six months of the year amounted to close to £519m (£518.505m).

Steven Law, R3 President, said: “Insolvent businesses continue to feature in a significant proportion of deals within the UK. The number of distressed deals has more than doubled since 2008 when one in twenty five deals involved an insolvent business. The recession may have officially ended but distressed businesses and assets are continuing to come onto the market.

“For buyers with access to funding, there is the opportunity to extend their portfolio while values remain subdued. For the businesses themselves, an acquisition represents a fresh start and a chance to secure the jobs of the workforce.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clickin here.

The latest Insolvency Index from Experian®, the global information services company, has revealed a year-on-year decline in business insolvencies during June. The overall financial strength score of UK businesses also improved, from 80.83 in June 2009 to 80.66 in June this year.

1,771 UK businesses failed during June 2010, 13.4 per cent fewer than in June 2009 when 2,044 firms became insolvent. As a result, the year-on-year insolvency rate fell from 0.10 per cent to 0.09 per cent in June.

At 0.14 per cent, the North East had the highest insolvency rate of the regions in June, with Yorkshire (0.12 per cent) close behind. In contrast, at the opposite end of the country businesses in the South West saw a UK low of 0.07 per cent, while Greater London had an insolvency rate of 0.08 per cent.

Rolf Hickman, Managing Director of pH Group, an Experian company, said: “June’s data indicates that the UK’s business community as a whole is stabilising, however it also points to the existence of a north versus south divide. Businesses in the north of England seem to be faring slightly worse than their southern counterparts across all industry sectors.”

“Although the data hints at some improvements, individual organisations are impacted in different ways. It is vital for businesses to understand the circumstances of those they are doing business with and the risks they could expose them to.”

Other key highlights include:

• Scotland was the only region of the UK to see an increase in the insolvency rate, up to 0.08 per cent from 0.06 per cent in June 2009
• As well as being the region with the lowest insolvency rate, the South West also held the highest financial strength score (82.50)
• Smaller companies with 11-25 employees saw the greatest year-on-year reduction in the insolvency rate (from 0.29 per cent in June 2009 to 0.20 per cent).
• The largest businesses with 501 plus employees suffered the most since last year, seeing the insolvency rate double from 0.07 per cent in June 2009 to 0.14 per cent.
• The smallest businesses (with 1 to 2 employees) were the only group to see an improvement in their financial strength scores – from 81.33 in June 2009 to 81.95 in June 2010.
• The financial strength of businesses in the transport industry rose from 75.98 in June 2009 to 78.20 – the biggest improvement compared to other sectors. This sector also saw its insolvency rate drop from 0.12 per cent to 0.07 per cent over the year.
• Businesses in the oil industry held the highest financial strength score during June (85.54)

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.