SMALL AND MEDIUM ENTREPRISES

Small and Medium Enterprises in a International Context



Small and Medium Enterprises in a International Context

There are a variety of reasons why changes in lending practices by banks may initiate a credit crunch. There may be less confidence in secured lending due to fluctuation in other markets, such as real estate (George, 2008, 15-26). In fact, this kind of market price collapse is a key contributor to creating a credit crunch. Banking institutions may also become concerned about the solvency of other banks and their ability to repay long-term fixed debts. Even the government can play a role in affecting credit availability by imposing restrictions on lending institutions. An unusual degree of defaults on previously issued credit may also reduce a bank's position to extend further credit. Any or all of these conditions can make obtaining credit lines and loans more difficult.

Whatever the cause of a credit crunch, it is almost always accompanied by higher interest rates, should a corporation or consumer succeed in obtaining credit (George, 2008, 15-26). This increase is often visible in the subprime lending market segment first, with a windfall effect on the conventional lending market to follow. The mortgage crisis that began in 2007 in the U.S. subprime mortgage industry is an excellent example of a credit crunch in action. While the housing market peaked in 2005, prices soon fell and continued to spiral downward, making refinancing almost impossible. As a result, variable interest rates on current mortgages began to climb, even though they were initiated at very low rates. As more and more homeowners were unable to meet their financial obligations, a record number of loan defaults and foreclosures occurred (Graham, 2008, 42-49).

Question 2

The Credit Crunch, escalating inflation and long term economic gloom have left many SMEs struggling to manage their overheads. GoHello™, the ALLmobile telephony system for businesses, is saying it's not all doom and gloom. By proactively using advancements in technology, businesses can reduce costs and achieve long term improvements and productivity that will remain in place even after the storm blows over. Developments in technology, combined with the ubiquitous nature of broadband and mobile phones, have changed the way in which business is done, enabling increased flexibility, mobility and cost savings that will make it easier to get through these tougher times. So here are some ideas on what you can do…

The logistical nightmare associated with remote and mobile working is now a thing of the past (Graham, 2008, 42-49). It couldn't be easier to set up broadband access, PCs and web-based phone systems from the home. Your staff will appreciate the flexibility and it will mean greater cost-effectiveness and efficiency for your business (Graham, 2008, 42-49).

What is the point in having a separate fax machine, scanner, printer and copier when you can have an all-in-one multifunctional device? Likewise expensive phone systems and CRM software can be replaced with easy to use web-based and ALLmobile alternatives, offering the same functionality at much lower ...