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Small businesses up and down the UK are still struggling to get by as banks fail to deliver enough funding during this ongoing credit crunch.

The Bank of England’s latest review of lending in the UK found that business lending is suffering its biggest drop in nine years – banks are still unable to offer enough credit to firms through mortgages, loans and overdrafts.

Eight out of ten firms included in the survey reported that lending had become scarcer and more costly over the past year, while two thirds said that they responded by cutting back on investments. You may have found that where once you were able to instantly refinance, now you are getting turned down for loans.

The best way to get through the crunch, and get credit for your business is to be the best borrower you can be. That means a top to bottom, root and branch reassessment of how much you are spending and how best to deal with debt.

Talk to a financial adviser about making your business more streamlined. This may mean a new business mortgage, it might mean remortgaging your home. You may need to move your money into an offset mortgage, or you may need to invest in a new bond or ISA.

There are many things a business can do to get through the crunch, it's all a matter of sensible planning and heeding sensible advice.

SOURCE: BoE, 09/07/09

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