Businesses 'need more credit'

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Businesses 'need more credit'

Thu 15th Oct 2009

The reason why so many companies are currently going out of business is because they do not have enough credit available to them, according to an academic expert.

David Molian, lecturer in entrepreneurship at the Cranfield School of Management, claimed that credit is very tight at the moment, particularly for small businesses.

He suggested that the government should get involved to try and free up some more finance for them, as it will allow firms to take on more debtors and thus do more trade.

Mr Molian added: "I think those businesses which are now going under have been fighting to get in every last penny and protect every last penny and now there is no more cash."

Recent research by the Institute of Chartered Accountants in England and Wales indicated that a third of firms report that access to capital is a bigger problem now than it was a year ago.

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