Credit Crunch or Business Opportunity?

For most people, the credit crunch has negative connotations – higher food and fuel bills, squeeze on pay rises, mortgage problems, customers delaying payment or going bust and banks reducing facilities.  However, in amongst all this doom and gloom, there are business opportunities – and those in a financial position to take advantage of it should now be making the most of it.

Inevitably, in these times, insolvencies increase.  Amongst those businesses going down will be some little gems – a good idea or a blue chip client-base which has failed because of a lack of funding or poor management.  Businesses which are cash-rich or have access to funding should be looking for these opportunities to expand.  You should let insolvency practitioners and their agents know what you are looking for so that they can let you know as soon as something is available.  These opportunities come and go very quickly and by the time you know about one, it may have already been snapped up.  If you contact me, I can let you have details of some of the major players in this area so that you know whom to contact.

Property investors fall into two categories: those who have spare cash which enables them to speculate and those who have borrowed to buy property in the boom times.  Many of those in the latter category will, before long, have to offload their portfolios and there will be some very good bargains for those in the former category to pick up.  If you are prepared to take them as a job lot, you may find the owners and their lenders keen to get them off their hands. 

Banks and other lenders are still in the market to lend if a good business proposition is put to them.  The days of cheap borrowing seem to be over but do not assume that there is no money out there.  In addition to the banks, the venture capitalists have lots of money to invest.  Their method of investment tends to be to take an equity share i.e. a percentage of your shareholding.  No-one wants to give up a share of their company but, think about it, are you better off owning a share – usually the majority share - in your company, which is going somewhere with others backing it financially and possibly opening doors to expansion, or owning all of the shares of a company which is going nowhere?  If you have a good product, but lack the financial resources or business acumen, don’t behave like some of those who refuse an offer and walk out of the Dragons’ Den empty-handed – and in most cases into business oblivion.

To contact Raworths, telephone 01423 566666 or visit our offices at Eton House, 89 Station Parade, Harrogate HG1 1HF. Alternatively you can email Mike - mike.sharp@raworths.co.uk.