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news Tel: +44 (0) 845 165 1560 Fax: +44 (0) 845 165 1561 continued from page 6
said Matt Telfer, Border to Border Exploration’s CEO. “We have concentrated on the most oil- prone part of the trend and expect high-volume, naturally flowing wells with rapid payouts.” The financing package, has initial borrowing base set at $55m. “This transaction enables us to fill a gap left by traditional lenders,” said John Schaeffer, managing director and head of the oil and gas unit at GE Energy Financial Services. “We hope it will be the start of a long relationship with Border to Border as its capital needs intensify, both for debt and equity.” Since 1991, GE Energy Financial Services’ oil and gas team has provided more than $4.5bn in partnership equity and debt to independent private and public oil and gas operators in the United States. Based in Stamford, Connecticut – with an office in Houston – the oil and gas unit is active in all major onshore basins and in the Gulf of Mexico. Madison Williams and Company llc served as financial advisor to Border to Border Exploration.
Changes to small business rate relief could have sting in the tail
CHANGES heralded as making Small Business Rate Relief (SBRR) apply automatically could instead lead to councils scrapping the tax break altogether, the Forum of Private Business and property specialist LeaseholdersUnited are warning. The upcoming Localism Bill will end the requirement for businesses to fill in an application form to claim the relief. Instead, the Small Business Rate Multiplier will automatically apply to eligible firms and, according to a government statement, councils will be free to administer Small Business Rate Relief in a way that best serves local businesses and local needs. Following its decision to increase SBRR from
October 2010, the government hopes the move will help businesses access the £200m in rate relief unclaimed each year. However, the forum is concerned that it could instead jeopardise some of the £500m per year that businesses are already able to claim.
8 November/December 2010
The forum’s property adviser, LeaseholdersUnited’s Andrew Bacon said that small businesses taking on five year leases and paying rents based on the assumption that they will be entitled to automatic Small Business Rate Relief throughout that period could be in for a surprise. “The recent announcement regarding Small Business Rate Relief has only made the Small Business Rate Multiplier automatic, which will result in a 2% drop in rate liability for businesses which haven’t claimed – a trivial sum,” explained Andrew.
“Removing the need to fill in a form to claim
SBRR is only a positive if SBRR is genuinely made automatic, as it is in Wales. But that is not what is being proposed. It is now to be granted at the discretion of councils.”
He added: “If the Localism Bill also makes councils collect extra rates under the Business Rate Supplement scheme in order to pay for SBRR, or allows them to keep what they collect in rates, granting SBRR becomes a budgetary decision for councils. If they don’t have the cash, or can’t raise it through the supplement, local businesses won’t get SBRR. “As we are still facing an extremely tough economic climate, the upshot of this could be that SBRR disappears, with small businesses being £500m worse off. If it is no longer going to be automatic and will be at the whim of a council, they need to be told this.” The forum has repeatedly urged the government apply automatically to counter the problem of a lack of awareness of the relief among business owners. The organisation has also called for councils to be given greater discretion to help struggling local businesses. “We welcome the principle of giving councils more powers to assist struggling small businesses, but £200m in rate relief already goes unclaimed each year. If SBRR is sacrificed by cash-strapped local authorities as a budgetary decision the proposed changes risk making the problem worse, not better,” said the forum’s head of campaigns, Jane Bennett. “It is the responsibility of the government to clarify that it is the Small Business Rate Multiplier that will apply automatically, rather than the full relief itself, in order to allow business owners to plan ahead properly,” she continued.
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The forum helps its members save money and manage their finances through its Finance Director business support solution. Through the solution, the not-for-profit organisation provides its members with expert advice on issues such as reducing business costs, improving credit ratings, business monitoring and business insurance.
Sombre Christmas for the construction industry
LACK of confidence and reductions in credit limits and terms by credit insurers and suppliers could destroy construction businesses. Due to the recent administrations of Connaught and Rok, many smaller firms are now finding themselves up against the ropes and fighting for survival RSM Tenon has reported. The accountancy and business advisers, believes that the collapse of these two giants highlight the hard times the construction sector is witnessing which could increase in 2011. RSM Tenon is calling it the ripple effect. Tom MacLennan, director of recovery for RSM Tenon, said: “What we are seeing in the construction sector is the result of a ripple effect right across the supply chain. When a large business fails, the knock on effect can be devastating as it can filter right through the whole industry – it is not uncommon for failures of businesses four or five levels removed from a large failure to occur 12 months or more later. Small businesses who supplied the two construction giants, Rok and Connaught may well struggle to survive after their administration.” The construction sector was hit hard in 2008 by dramatic reductions in work due to private property sector difficulties and is now being affected by proposed public sector cuts that will only take full effect well into 2011 and beyond. Tom continued: “Credit Insurance is also an important factor for this sector as there are only three key players in the market and if they withdraw the credit percentage or limit it, the cashflow within the business can also be severely damaged. In my experience, the construction sector is currently operating on tiny, if not, negative margins. Some firms are taking on contracts with negative margins for cashflow to try and sit it out.
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