Outlook for Firms Seeking Funds Not as Bleak as It Might Appear; He Has Been Referred to as a 'Grim Reaper'. but John Kelly, T the Regional Managing Partner of Begbies Traynor in Birmingham - Who Started Dealing with Distressed Businesses Shortly after Qualifying as a Chartered Accountant in 1977 and Has Subsequently Lived through a Few Recessions - Reckons That the Situation Today Is Not Quite as Bleak as It Might Seem
Byline: John Kelly
Ihave been at the 'coal face' dealing with distressed businesses on a dayto-day basis for more than 30 years. My public profile invariably associates me with my insolvency appointments but the reality is that most of my time is spent assisting businesses - of all types and sizes - to turn themselves around and to survive.
And yes, there have been some distressing situations and some dire stories but equally, there have been significant successes when companies that were failing are revived, survive, prosper, create growth, prosperity - and jobs.
In my view, and contrary to many of the headlines, the outlook is not quite as bleak as might be thought.
For a start, a record number of new businesses are being registered at Companies House.
Last year, the number was up by 14 per cent and this year it is already running at 19 per cent up on last.
Given that the engine room of our economy is small and medium-sized enterprises (SMEs), this is good news.
(SMEs, incidentally, account for 99.9 per cent of all enterprises, 58.8 per cent of private sector employment and 48.8 per cent of private sector turnover so they are a force to be reckoned with.) When you look at the total business universe, there were an estimated 4.5 million private sector businesses in the UK at the start of 2011 - an increase of 94,000 since the start of 2010.
These businesses employed an estimated 23.4 million people and had an estimated combined annual turnover of pounds 3,100 billion.
These figures, if you are wondering, come from the Department for Business Innovation and Skills and are produced by National Statistics.
So the number of businesses is grow-w ing and whether start-up or established, the majority will nearly always need a source of finance - so someone out there must be funding.
Today, there is probably a greater range of finance available for new and established business than there has ever been before.
It is true that many funding arrangements require personal guarantees or some other form of security but that is part of the risk/reward consideration of forming a new business or developing an existing.
Headlines seem quite clear that banks are failing to lend but my analysis of the situation, based on my dealings with banks particularly when businesses are in distress, is that there are normally opportunities out there.
Indeed, the last thing we want is for banks to be involved in reckless lending that led to the banking crisis in the first place.
Not so long ago I took to task the vice president of my own professional society who criticised the level of bank lending. …