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Small Firms Chipping Away at Debts
23/12/08  Record levels of debt are being consolidated into single loans so businesses can repay existing debts and boost their own credit rating. Manchester-based Bridging Finance Limited has seen a 30% rise in the number of small businesses refinancing with a single short term loan so they can trade through the recession. Chris Baguley, managing director of Bridging Finance Limited, a specialist business lender, said: "Firms are clearing their fragmented debts by using a single loan secured against their property. The situation is that many businesses have poor cash flow but strong levels of equity in their commercial premises. "Bridging loans were once used to buy property but now they are seen as a credit repair product. Sale and leaseback deals have dried up so this is the next sensible option in many cases. "Businesses can build up a good credit rating within three to six months and this means that by the end of the term they are better able to meet the stricter lending criteria being applied by many banks." print page
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