Manufacturers 'turning to bridging'

Pointing to last month's CBI quarterly SME Trends survey revealing a bleaker outlook for the next quarter, Bridging Finance Ltd managing director Chris Baguley says manufacturers are relieving the pressure by taking on short-term finance. Baguley, says there has been a 27 per cent increase in the number of manufacturers applying for bridging loans from his company in the first quarter of 2008 compared to 2007. "The squeeze on profit margins means that cash flow is becoming a major issue for small and medium sized manufacturers. This latest report by the CBI indicates that our situation is typical of lenders who are able to fulfill the gap that some banks are leaving as they pull out of the market. Accountants and other professional advisers are increasingly recommending to their manufacturing clients that a bridging loan is a good option to ease the pressure until long term finance can be arranged.." However, Barclays national head of manufacturing Ray O'Donoghue said the sector continued to be important to the bank which sees itself as something of a champion of manufacturing. "Funding is still very much available for the right companies and projects," he said. "We remain very much open for business."