The Credit Crunch

August 14th, 2008

Well it sounds like one of those rather nice biscuits with cream sandwiched in between. Unfortunately, it’s more akin to a business which owes money to banks through loans and overdrafts finding itself sandwiched between a rock and a hard place.
As the banks restrict lending more and more those businesses exposed to high borrowings will be the first to suffer. This is either through lending being withdrawn and/or the cost of borrowing increasing substantially. Either way in an environment where sales are under pressure as well, it’s getting less pleasant a situation as each day goes by.
Still, at least there isn’t a recession in the UK (but only if you ask the Government).

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