Whilst the credit squeeze has forced many organisations to focus sharply on cost savings in purchasing and procurement, the effects are felt the other way too for many smaller companies as suppliers begin to limit the availability of commercial credit.
A recent poll of 400 British companies by Graydon UK found that 56% would become more picky about who they offer credit to during the rest of 2008. Martin Williams, Graydon UK's managing director, said a "safety first" culture was now widespread with lenders raising the cut-off point on companies' credit scores. "Suppliers are looking long and hard at those companies who are asking them for credit," he said. "People are asking for better credit scores and so rejecting more companies."
Businesses that have been trading for less than 20 months were bearing the brunt of tighter credit policies because they are perceived as the most risky, according to Mr Williams. "Some people are simply saying no to new businesses".
