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Credit refusal triples

Article Date:  Apr 03 2009

The amount of businesses being refused bank credit has nearly tripled since last year, according to invoice and asset-based lender (ABL) Venture Finance.

A survey of accountancy firm clients conducted last year by Venture Finance showed less than a fifth of companies had been refused credit from traditional sources such as banks, with this figure increasing 58 per cent over the last 12 months.

Peter Ewen, managing director of Venture Finance, says: ‘Our research lifts the lid on the state of British business in these challenging times.

‘The significant rise in companies suffering bad debt, combined with restricted access to finance, has encouraged others to take out bad debt protection for peace of mind.’

Of the 1000 accountants surveyed, 71 per cent said they have seen an increase in clients suffering with bad debt.

The findings also revealed that businesses in the North East are suffering the most, with 73 per cent of accountants’ clients having refused credit, compared to 48 per cent in the South East.

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