The Live Wire



Press Release

Fewer businesses believe banks are supportive

26 July 2011

The number of businesses who believe the banks are being supportive has decreased, according to insolvency trade body R3's Business Distress Index. The quarterly report, which looks at the financial position of UK businesses, reveals that one in three (32%) believe the banks to be supportive, compared to 43% of businesses in the previous quarter.

Businesses perceive that support from creditors has decreased across all creditor groups; 23% of businesses believe trade creditors to be supportive compared to 39% in March 2011, while 26% of businesses believe HMRC are a supportive creditor compared to 39% three months ago.

R3 President, Frances Coulson, comments:

"The increase in the number of businesses who no longer feel that banks are being supportive indicates that a growing proportion of the business community are either struggling to service their existing debts or finding it hard to acquire further lines of credit.

"As we have seen in previous recessions, once the economy begins to show signs of recovery, creditors tend to make a more concerted effort to pursue those who are indebted to them and tighten up their lending facilities. However, we are still in the early stages of recovery and it takes time for this to translate into tangible relief for businesses. For the businesses that used all of their reserves to survive the recession, supportive creditors are more important than ever.

"Insolvency Practitioners working with distressed businesses are seeing an increase in the number of Time to Pay applications being rejected. This may well explain why HMRC is no longer seen as a supportive creditor.
"On the other hand, a reduction in perceived support from creditors may indicate a diminished need to call on creditors by businesses, as the index revealed key signs of distress and fear of insolvency have decreased."



Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to Central Lobby. We promote their parliamentary and political campaigning activities as they are subscribers to the Central Lobby service.

As such, Central Lobby does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.

R3 The Insolvency Trade Body

R3 The Insolvency Trade Body

More from Dods

© Dods Parliamentary Communications Ltd