KPMG chief comments on impact of harsh trading climate

Lenders continue to reduce ‘bilateral’ debt facilities, such as overdradts,
forex and BACS services, Simon Collins,
KPMG head of
Corporate, notes, commenting on how the latest developments in the economy are
affecting his clients.

‘This cash will be a vital lifeline in the first quarter of 2009. Some
businesses will feel the pain more acutely, particularly in the retail, leisure
and house-building sectors, which have increased working capital requirements
after the New Year in the run up to Easter.

‘Retailers and house-builders, for example, build up stock in the run up to
spring. This will have wider repercussions for the suppliers into these sectors
as well meaning the reduction of these facilities now could have far-reaching
consequences next quarter.

‘The inability to access bilateral loans could be the tipping point for many
businesses as they brace themselves for the harsh trading of January and
February next year.’

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