Businesses 'looking to tackle debts' - commercial mortgages

15 December 2008

Businesses will be looking to consolidate debts in 2009 as a way to tackle the recession, it has been claimed.

In comments that may be relevant to those with commercial mortgages, managing director of Bridging Finance Chris Baguley said that debt consolidation will be a "major theme" for small and medium-sized enterprises (SMEs) next year.

Small firms will use loans as a method of clearing their "fragmented" debts and building up a better credit rating, he predicted.

He remarked: "Bridging loans were once used to buy property but now they are seen as a credit repair product. Sale and leaseback deals have dried up so this is the next sensible option in many cases."

The Manchester-based lender has experienced a 30 per cent increase in the amount of SMEs using a single short-term loan to refinance.

It comes after Bill Barclay, the managing director of Galapark Finance, advised businesses to check there are no mistakes on their credit reports that could damage their ratings.