Spain’s debt crisis worsens as euro uncertainty grows

The Eurozone crisis is continuing to worsen and it is expected that Spain is unlikely to be able to escape a bailout as its debt continues to rise. This has led to increased uncertainty about the future of the euro and whether the single currency will survive into the future. The problems in the Eurozone have been affecting countries as well as businesses worldwide and it doesn’t seem as if any relief is going to happen in the immediate future.

The crisis in the Eurozone is not just affecting countries which have adopted the euro however and businesses in the UK are also being affected by the problems, especially smaller businesses. Payment periods are being extended and this is having a negative impact on the cash flow of suppliers. This has led to several suppliers having to default on various payments which lead them down they dangerous decline which might be unrecoverable from.

The idea of the credit crunch is something that has become dated but it is still an everyday reality for businesses in the UK. The availability of lending has fallen for the last three years according to recent figures from the Bank of England. Credit lines are being tightened by banks and financial policies are being made more conservative.

Financial directors in the UK were recently surveyed and it was shown that around half of them believe they are more likely to lengthen the terms that they allow for payments from their suppliers.

Unfortunately the renegotiation of payment terms and dates can seriously affect smaller businesses as they are usually supplying products and services to larger companies. As larger companies begin to put pressure on the suppliers, they suffer and might not be able to continue in business without serious financial problems.

It is essential that businesses start working together more so that they can both remain in business and continue working together. It is important that the payment process is sped up so money arrives with suppliers as quick as possible. This improves their cash flow situation and their overall financial health.