BUSINESS
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CREDIT CHECK • A new computerised credit-monitoring service for the motor industry has been launched by the recentlyformed Advance Information Consortium.
The scheme is designed to give an early warning to clients on the finances and operations of outside companies. All information collected is interpreted to provide clear advice on their credit worthiness.
Benefits claimed by A1C include the presentation of immediate and accurate information about companies well in advance of potential or actual insolvency. AIC can monitor the stability and capacity of companies and automatically highlight those which fail to file accounts for 18 months. Clients are also immediately notified of creditworthiness changes following the registration of new information.
In addition to its risk evaluation service, A1C can also be used for identifying client customers with increasing purchasing power and a credit status higher than their normal debt; for monitoring competitors, clients and suppliers; and for identifying other companies or market sectors ripe for takeover or attack. Further details are available on 01-5831696.
SMALL FIRM LOANS • Barclays Bank expects to extend the £120 million it has already lent under the small firms loan guarantee scheme now that the Government's revised scheme offering easier terms has come into effect.
Introduced in 1981, the small firms loan guarantee scheme is designed to assist small, and new, businesses to obtain finance which, if subject to normal bank assessment criteria, would otherwise not be available. The bank receives a guarantee for 70% of the loan from the Government.
In this year's budget, the Chancellor announced that from May 1 the annual guarantee premium, payable quarterly in advance by the borrower on 70% of the reducing balance, would be cut from 5% to 2.5%.
The maximum loan under the scheme is £75,000 and the minimum £15,001, repayable in equal monthly or quarterly payments, over two to seven years. Interest only may be paid for the first two years on loans of three years or more, and one year for loans of less than three years.
Barclays charge a 1% arrangement fee on the loan, up to a maximum of 2500, and the interest rate is 2.5% above Barclay's Base Rate — currently 10.5%. It now claims to be the biggest lender to small businesses with £7 million lent to firms with an annual turnover below £1 million.