"Research by a leading social entrepreneur networking website has revealed that nearly 40% of small business owners and social entrepreneurs have experienced cash flow problems in the last few months as a result of the worsening economic situation."
Along with facing day to day cash flow difficulties, it would appear that small business owners are finding it harder to secure finance with 68% of those business owners who had recently applied for a business loan or credit card being turned down.
21% said that their business had been badly affected by the recent financial problems in the UK such as a training, research and consultancy company who has faced difficulties in its industry due to a reduction in buyers’ budgets.
"Small UK firms are struggling in the face of the credit crisis to secure the loans they need to expand or even survive, a business group has warned." BBC Headline
"Analysts say that this implies that banks are reluctant to lend money - and that where they will offer a loan - it will be at higher interest levels."
"The issue is that the banks are being more choosy over who they lend money to until they ride out the storm," said FSB spokesman Matthew Knowles.
Every day the news reports another company that is laying off thousands of workers or one that is shutting its doors permanently. There are very few news reports that do not have some mention of the “global credit crunch” and while we are getting tired of the phrase, it is one that is likely to be around for quite some time yet.
The housing market has also taken a huge hit during the global credit crunch. Only a year or so ago house sold at high prices and many homeowners borrowed heavily on the equity they had built up in their homes.
The huge drop in house prices on the real estate market means that many homeowners with home equity loans or lines of credit are now finding themselves in a position of negative equity. This means that the price for which they can sell their home is not enough for them to even be able to pay off what they owe on the home, let alone pay off other outstanding debts.
Consumers have cut back on their spending habits and are becoming more fiscal in looking after their finances. Manufacturing sectors, retail outlets and the service industry has been affected as a result with consumers buying only what they absolutely need. The big name stores are losing money and are not making as much profit as they have been accustomed to making and therefore are downsizing in the numbers of staff members they have on the payroll.
It is not just the large businesses that are suffering from the credit crunch. Many small businesses have had to declare bankruptcy and there have been huge job cuts in the manufacturing and service sectors of the economy
Here I have only been on the internet for 5mins and there is no shortage of information on the situation of the "Credit Crunch" These are just a few of the top links on google.
It is clear that banks are becoming more and more tougher to who they give loans out to and due to this many businesses are having to close or to un-employ staff. It is also having an impact on the housing market and the value of houses are decreasing meaning that home-owners have to be more careful on the money they spend it and where they spend it, meaning that small and large business's are not getting as much money as they used to which comes back to the issue of retailers and businesses closing and shutting down.
As it is affecting most areas of the retail area, I have chosen to document and to photograph the impact it is having on the small businesses around the city of Plymouth, By selecting only this city, it narrows down to where I document and I can look closer to the problem.
Initial thoughts on where to go and what to research for this project on Documenting the effect the credit crunch is having on small businesses.
- Continue to photograph shut down small businesses
- Interview small business owners
- Look at Deadpan Photography
- Try to get access to some closed down stores and photograph within them
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