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Commercial news
Scotland in recession
New online
According to Fraser of Allander economic activity until at least 2012. “Scottish businesses are undoubt-
tax help
Institute’s Economic Commentary The Economic Commentary also edly in for a tougher, longer ride in
February 2009, suggests the recent UK fiscal stimu- the downturn than was previously
for small
“There is now almost complete lus appears to be ‘too little too late’ thought, and they should be under
certainty that not only is Scotland and ‘relatively small compared to the no illusion now as to how suddenly
businesses
currently in recession but that the US fiscal package’. The significant their trading position could change
recession looks likely to be as severe loosening of monetary policy con- in the current volatile and uncertain
A series of online, bite-sized
as that in the 1980s and could even tinues to be thwarted by the liquidi- climate. The Economic
be worse.” ty trap as faced with falling asset Commentary and Forecast point to
video guides for new and
As a result of the unprecedented prices banks hold cash rather than a route map for business. It suggests
small businesses has been
scale and increasing severity of the lend. This ‘catch 22 scenario’ further key economic indicators that busi-
launched by HM Revenue &
global and UK recession, 2009 and strengthens the case for temporary ness leaders can refer to when evalu-
Customs (HMRC).
2010 will be the most difficult years bank nationalisation and creation of ating options and adapting their
The 10 videos, fronted by
the Scottish economy will have a ‘bad bank’ for toxic assets in a fur- plans and strategies in a rapidly TV presenter Dan Snow,
encountered since WWII, according ther attempt to unfreeze bank lend- changing economy.
provide a helpful overview on
to the Fraser of Allander Institute. ing, according to the Institute. “Businesses that are able to move
a range of tax issues,
Scottish GVA is projected to fall by Professor of Economics at quickly to either protect the down-
including setting up in
2.57 per cent in 2009 and will only University of Strathclyde, Brian side against an unfolding ‘worst case
business, income tax for the
grow by 0.52 per cent in 2011, while Ashcroft said: “In November the scenario’ or to react rapidly to signs
it estimated up to 146,000 jobs Institute considered there was a of an early recovery, are likely to be
self-employed, corporation
could be lost and unemployment is ‘high probability’ that Scotland better placed than their competitors
tax and VAT. The videos also
forecast to increase from 5.1 per would go into recession in 2009. whenever economic and market
provide handy links to further
cent to 7.9 per cent in 2010 and There is now almost complete cer- conditions do improve.
online information and help.
remain above 7 per cent through tainty that not only is Scotland cur- “We have yet to reap the benefits
The presenter Dan Snow
2012. rently in recession but that the of the fiscal measures already said: "We've broken the
Reflecting the speed and depth of recession looks likely to be as severe taken by central government to
information down into small
the contraction in the last quarter, as that in the 1980s and could even counteract the recession. It is also
video chunks, so that people
the latest Fraser of Allander be worse.” imperative that the Scottish
can access exactly what they
Economic Commentary, supported The latest Economic government and organisations such
need to know. Hopefully this
by PricewaterhouseCoopers LLP, has Commentary also looks at how as Scottish Enterprise put every
forecast a significant downward Scots can more effectively deal with effort behind supporting Scottish
makes the new videos really
revision in the expectations for the consequences of recession, as companies through use of their
useful for people and
Scottish growth over the next three Paul Brewer, senior partner of investment funds and through
businesses."
years. Indeed, the Scottish economy PricewaterhouseCoopers LLP’s training programmes for those
In addition, HMRC is also
will not return to 2008 levels of Edinburgh office explained: seeking work.” following three people as they
set up in business in a new
One in ten SMEs turn to family and friends
video diary series called "The
Start-up Diaries". It will
follow three people - Ruth,
Over 540,000 SMEs across the banks now closing their doors to businesses, the fundamentals of
Nick and Hannah - as they
UK are turning to family and SMEs, owners are relying on factoring and invoice discounting
explain, in their own words,
friends for cash rather than friends and family for financial haven't changed. Close Invoice
what it's like to go it alone.
banks - six times as many as support, placing immense pres- Finance is interested in the
when polled in early 2008 - sure on these most precious rela- integrity of debt not the compa-
An introduction to the series,
according to research from Close tionships." ny balance sheet or rate of
plus episode one of the
Invoice Finance. He continued: "As the reces- growth and therefore approach
diaries, is also available from
The survey of over 500 SME sion takes hold, the adage ‘Cash is businesses in a very different way
today.
owners indicates they are having king' has never been so true. to traditional lenders who are
A free guide for new and
to rely on family and friends as SMEs need to be far more cre- focused on more obvious indica- small businesses has also
bank funding dries up. Less than ative in how they source working tors of business success. Invoice been launched alongside the
6 per cent of SMEs said they were capital and deadly serious about finance can represent a lifeline to
videos, entitled "Giving your
confident their bank would tackling late payment." companies that have seen other
business the best start with
extend them credit into 2009 The central premise of invoice forms of trade finance dry up.
tax".
compared to 73 per cent of those finance is that it allows compa- Research findings are based on
polled last year. nies to raise cash quickly and eas- a survey of 505 UK SMEs com-
The videos and guide are
David Thomson, chief execu- ily against their sales ledger, missioned by Close Invoice
all available to download free
tive officer of Close Invoice affording businesses a greater Finance and indexed against the
from the Business Link
Finance said: "The relationship degree of flexibility and control findings of the first Small
website at
between banks and SMEs has col- over their cash flow. Business Finance Barometer
www.businesslink.gov.uk/
lapsed with severe repercussions Despite the deterioration of completed in March 2008. taxhelp.
for the sector as a whole. With the credit profile of many
March 2009 Commercial Finance Introducer
www.mortgageintroducer.com
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