Credit squeeze 'will not affect new business'

News Article - Wednesday, January 23, 2008

filed under: Business

Entrepreneurs starting a new business should not be put off by the current financial climate, it has been reported.

Dr Lorna Collins, director of NCGE Flying Start, claimed that the small amount of funding required to start a new company is still available, despite lenders tightening their belts.

"This kind of funding is readily available and not much affected by the credit squeeze, though cost of credit may increase and that will affect profits," she explained.

Dr Collins also claimed that the credit crunch has not changed the fact that a businesses success depends on their ability to control costs, of which credit is a factor.

However, she said that the credit crisis will affect business growth once they are fully established.

According to the adviser, careful planning needs to be taken when setting up a new business if the entrepreneur's personal financial situation is weak.

Last month, the Confederation of British Industry downgraded its forecast for UK growth this year.

It placed the annual rate of GDP at two per cent, a 0.2 per cent decrease on September 2007.

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