by John Mardle, Director, Working Capital Optimisation, Develin & Partners
CFOs, FDs and treasury functions are coming to terms with the ‘perfect storm’ that currently hangs over the business credit areas and directly impacts their cash management techniques. Though we are now in 2011, rather than abating the storm is still gathering force. So what’s behind this, and how can we weather its effects and sail out the other side without storm damage? What is causing the storm to gather force? We believe there are five major aspects:
Banks are finding it ‘challenging’ to lend to any organisation
Why? Some key players have voiced their views:
Lloyds CEO Eric Daniels, in response to criticism, said recently that it wasn’t a question of the banks being ‘mean’ but that there is a lack of demand because businesses don’t want to take on debt.
China has produced its own credit rating agency which recently put most European countries’ debt into a ‘poor’ rating category.
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