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Commercial Finance: News
31
Directors
NACFB survey reveals
in the
firing
impact of recession
The National Association of Adam Tyler, commented: "These sharply, however the impact of the
line
Commercial Finance Brokers figures reveal the true and shocking current economic woes hit them a
(NACFB) has announced the results picture of the struggling SME few months after the commercial
of its latest annual survey of its community. Despite many lenders' mortgage and buy-to-let brokers
members. protestations that they are lending had already started to struggle."
Directors and officers are at The survey has revealed that total more than ever, these figures reveal “Without growth in this vital
greater risk of being sued as more funding has fallen by nearly 60 per what anecdotal evidence has part of the UK economy, the climb
businesses face liquidation, says cent year on year, buy-to-let already shown: that funding for from recession will be very slow
Aviva. business reports a staggering 88 per businesses is very hard to get access and very painful indeed."
The Insolvency Service cent drop and some members to.” For more information about the
statistics released for the first reported an 85 per cent drop in He continued: "Figures from results of the survey, Adam’s article
quarter of 2009 show that in business year on year leasing and asset finance and vehicle starting on page 34 looks at the
total, there were 4,941 Chief executive of the NACFB, finance brokers have fallen less results in greater depth.
compulsory liquidations and
creditors' voluntary liquidations,
an increase of 7.1 per cent on the
Economic growth may falter in 2010
previous quarter and an increase
of 56 per cent compared to last
year.
according to L&G
Robin Farquhar, head of
specialist lines for Aviva, said: “As "While the stage is set for a global debate. While economic data and government stimulus wear off, the
we become a more litigious economic comeback, there is scope business surveys have painted a far US and UK economy may suffer a
society, directors and officers are for disappointment in 2010, brighter picture of the global relapse in growth."
facing additional pressures as particularly in the US," explained economy in recent months, Tim Tim concluded that LGIM is not
more businesses face closure.” LGIM economist Tim Drayson at explained the need for investors to anticipating a double-dip
When a firm faces insolvency, a Legal & General’s latest show caution. recession, rather, a relatively
director's duty to creditors Fundamentals briefing. "We expect business surveys to subdued period of growth next
intensifies. In all types of Economics data shows that the continue to improve for a few year. "While we believe the global
winding-up, the official receivers global recession is coming to an more months as global industrial economy may produce a short
can examine the conduct of a end and financial markets have production expands briskly. period of above average growth
firm's past and present directors rallied following an end to the However, we remain doubtful during the second half of this year,
and officers. Insolvency financial crisis. However, with about the strength of final demand it will fall back towards its long
practitioners will often try to households yet to adjust fully to for goods and services as term average in 2010. As a result,
recover money for a company's the credit crunch and companies consumers remain under pressure central banks are likely to keep
creditors by bringing a claim remaining cautious, the strength of to rebuild their savings," Tim said. official interest rates on hold,
against a director for either a the economic recovery is under "Once the initial effects of potentially until 2011."
breach of their duties, or
fraudulent or wrongful trading.
"As directors are automatically
Business confidence at a high
exposed to unlimited liability,
allegations made against them, The latest Lloyds TSB Corporate those with positive expectations. optimism rose only marginally, to
whether they are guilty or not Markets Business Baromoter has In August, the number of firms 61 per cent (from 60 per cent last
can be costly. And not knowing shown British businesses are expecting activity to improve month), but levels of pessimism
the ins-and-outs of the law is no now more confident about their over the coming year fell slightly, declined more markedly (from 20
defence." future than at any time in the from 45 per cent in the previous per cent to 15 per cent).
Corporate Legal Liability past 15 months, and are month to 42 per cent. But this Trevor Williams, chief
protects companies against the regaining their optimism in decline was offset by a great fall economist, Lloyds TSB Corporate
financial consequences of a wide the outlook for the wider in the number of businesses Markets, said: "We're now seeing
range of claims made against economy. expecting activity to slowdown - a clear upward trend in firms'
them. Employment Practices The survey, for August, shows 10 per cent in August, compared confidence about their own
Liability protects companies that, the overall balance of firms to 15 per cent in July. prospects and those for the
against financial loss from claims expecting business activity to rise The balance of firms economy as a whole. As global
made by employees for a wide over the next 12 months rose to anticipating better economic demand stabilises and shows
range of employment practice 32 per cent from 30 per cent in conditions in the next 12 months signs of recovery, businesses are
violations including unfair July. The balance is calculated by rose to 46 per cent, from 40 per once again starting to rebuild
dismissal, discrimination and deducting the percentage of firms cent in July. The number of their stocks, after many months
harassment. with negative expectations from companies reporting greater in the doldrums.”
www.mortgageintroducer.com October 2009 Mortgage Introducer
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