Only the strong survive in the Dragons’ Den

So Dragons’ Den star Peter Jones has weighed into the SME credit argument,
taking a tough line on suffering companies. He warns that credit must be
drip-fed into the economy, as a flood would allow undeserving companies to avoid
the inevitable.

This could put the UK economy on the back foot, as these underperformers
would only collapse later down the line – at the further expense of creditors,
suppliers and banks.

If this happened, and banks shrunk back into their shells, better structured
companies could suffer another credit crisis.

The slow growth in transactional work we are seeing for advisers would boom
and bust and we’d be back to where we started. To preserve our chances of
getting out of the hole we’re in, the flow of credit must be controlled, but we
sympathise with the plight of advisers’ clients going to the wall without good
reason. For the greater good, we can’t go back to the bad old days, or “the
self-fulfilling cycle of increased debt”, as Jones told Accountancy

Further reading:

Credit boom would save bad businesses, warns Dragon

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