Newspaper article Evening Gazette (Middlesbrough, England)

Feeling the Squeeze in the Crunch; Business & Financial Advice

Newspaper article Evening Gazette (Middlesbrough, England)

Feeling the Squeeze in the Crunch; Business & Financial Advice

Article excerpt

THE credit crunch has left many small and medium-sized businesses in the Tees Valley feeling the squeeze, according to one advisor who helped two to refinance in a week.

"The banks, nervous about the amount of money they are owed, are requiring more and more businesses to refinance their commercial mortgages - in other words, borrowing against the value of the business," said Karl Pemberton, a director of Active Financial Services, Guisborough.

While Woolworths might not have had much trouble extending its revolving credit facilities to pounds 385m over four-years in January, small businesses are finding the banks less obliging, he said.

"Any business that does not tick all the right boxes in terms of stagnating property values, reduced profits and poor projections, is finding it very difficult to secure a new package."

One client - a restaurant and guesthouse, which had been with the same high street bank for 20 years - had been asked to switch from an interest-only mortgage to a repayment one. …

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