Start-ups threatened by credit clampdown

Fallen on hard times: Getting credit has always been a challenge, but will be more so this year.

Smaller resellers and start-ups could be hit this year, as companies offering credit become more stringent, a report by credit reference agency Graydon has revealed.

More than half (56 per cent) the companies that offer credit plan to take a more conservative approach the research found, with only two per cent of the 401 companies polled intending to soften their stance.

The report also revealed that only 10 per cent of companies’ credit departments plan to take on more staff this year, with the same number claiming they would reduce staff numbers by the end of 2008.

Mark Ancell, head of intelligence at Graydon, told CRN e-tailers and shop resellers will suffer.

“This situation will continue. If anybody is looking to start up a new company at the moment, they will find it extremely difficult,” he said.

Adam Harris, managing director of reseller Bear IT, which was founded five years ago, claimed getting credit had always been a challenge.

“We grew organically with no inward or outward investment, so we never looked appealing. For three years we had to use a factoring company. Only now are we beginning to get credit,” he said.

Integrator and distributor hybrid Innova Wireless launched last month and president Martin Cassidy said: “I was worried about us as a new company being able to trade, look the part and get the credit.”

But he said his firm would still extend credit to fledgling VARs: “I would take risks on people with a track record and quality if I felt that they were the right people, because I want to work with exciting start-ups.”