Without easy access to
borrowing, many companies will decide to lay off staff, cease recruitment or
reduce pay awards.
The consequent reduction in disposable incomes reduces
retail spending and affects economic growth. But Government schemes exist aimed
at addressing this.
The availability of credit can be crucial to an
organisation, especially in the early years or where the organisation is
seeking to expand, recruit or carry out important research. Any reduction in
the availability of credit can adversely affect an organisation’s cashflow.
Just like a private individual, an organisation seeking
finance will have their credit worthiness assessed by a potential lender.
Credit worthiness may be assessed using evidence from many sources, such as:
Media reports about the organisation
Data obtained from suppliers and other parties
the organisation works with
The organisation’s financial statements
The organisation’s track record in meeting
previous loan obligations
Banks can be reluctant to lend to smaller organisations;
these are seen as high risk loans as so many smaller organisations fail. The
lack of adequate security is a common reason why a business loan application
may be unsuccessful. The recent credit crunch has only made banks less willing
to lend to organisations, or to increase their overdraft limits, and the credit
squeeze has also made it harder for business owners to obtain personal loans
and increased credit card limits.
A Bank of England report in October 2011 revealed that the
average interest rate being paid by businesses was 4.68%, well in excess of the
Bank’s base interest rate. The report also stated that lending to businesses
with turnover below GBP 25 million had fallen by 5.1% in the previous 12
The economic effects
of a business credit crunch
If an organisation is experiencing difficulties with
cashflow, it may respond by cutting staff, or at least by ceasing to recruit
new staff. Unemployment rates then rise dramatically. An organisation may also
choose to address its financial difficulties by freezing pay increases, or
granting increases that are well below inflation.
Unfortunately the above scenarios result in reduced levels
of disposable income for large numbers of people. This means that people cut
back on their retail spending and buy fewer goods and services from businesses,
thus increasing organisations’ woes further and creating something of a vicious
In response to the adverse effect this is having on economic
growth, the United Kingdom government has set targets for the banks to meet
regarding the amount lent to small and medium-sized enterprises.
In order to
encourage the banks to lend, the government has at various times operated
initiatives such as the Small Firms Loan Guarantee Scheme and the Enterprise
Finance Guarantee (EFG) Scheme. The latest incentive was the National Loan
Guarantee Scheme announced in the 2011 Autumn Statement, where it was confirmed
that the government will underwrite GBP 40 billion of low-interest loans to
companies with annual turnover of less than GBP 50 million, in what has been
described as a credit easing scheme. In the same statement, it was revealed
that the EFG Scheme was being extended to cover organisations with turnover up
to GBP 44 million.
Secondly, which chocolate are you after, according to your tastes and preferences.
The main types of chocolate are white chocolate, milk chocolate, semisweet chocolate, bittersweet chocolate and
These types of chocolate may be produced with ordinary cacao beans (mass-produced and cheap) or
specialty cacao beans (aromatic and expensive) or a mixture of these two types. The composition of the
mixture, origin of cacao beans, the treatment and roasting of beans, and the types and amounts of additives used
will significantly affect the flavor and the price of the final chocolate.
But now in the news, it seems that chocolate content get smaller, but prices reamin the same. A kind of indirect theft.
"...According to reports in The Grocer magazine, Quality Street tins will be
reducing their tin sizes this Christmas - from 1kg to 820g..."
However, other product have been doing the same recently. Colgate FluoriGuard changed their packaging and dropped from 500ml to 400ml too - and kept the same price as well.
Presumably the reason that food and drink companies are more attracted
to this kind of subterfuge than other types of business is that it’s
easy to quietly and subtly “adjust”, say, the number of chunks on a
chocolate bar or the amount of yoghurt in a pot without too many people
As long as the price stays the same, you can be pretty
confident that hardly anyone rushing around the supermarket on their
weekly shop will bother to check the small-print weight on the packet.
Chocolate is always a winner. Always present on birthdays, parties and celebrations.
One of the finest is from La Maison du Chocolat: tasty, creamy, rich and strong. But your wallet will be lighter too.
Such goods are usually welcome because there is quality and the price is proportional to it.
A piece of nice chocolate is very recomforting. Healthier than a cigarette and the flavours are unique according to the provenance of the beans. It works actually the same way as the coffee. Stronger, lighter, darker, sweeter, bitter...etc.
But some individuals still prefer to buy really sweet and tasteless chocolate because of the low price. But quality can't be cheap and this works for everything: clothes, food, films, shows, books...
It is understandable though that not everyone can spend £4.60 on a chocolate eclair...or could they if they saved on something else less useful such as buying such and such Apps for their smartphones?!
People have different priorities and it is maybe time to rethink what is good for your well-being and happiness.