"While this level of gearing was available when banks were keen to lend and confidence in global markets was high, the economic climate has now changed dramatically and such gearing is unsustainable as banks seek to de-gear their balance sheets by at least 15 per cent.  So, while the shopfront and headline figures of the business look healthy, the high level of debt that the business is operating with creates a totally different picture and may lead to a trading liquidity crisis."

“While huge interest payments of tens of thousands of pounds per month were serviceable when credit was available, now that banks are looking to pull in capital, the available working capital is being reduced to businesses. Now apparently healthy, profitable and growing businesses are facing immense financial pressures and potential insolvency due to the credit squeeze."

“While businesses that predicted the credit crunch acted decisively several years ago to manage down the level of debt, there is a hidden strata of enterprises in the electronics sector that has been badly caught out by the sudden loss in confidence in the banking world.   Growing technology businesses are inherently cash-hungry, and typically highly leveraged. Not only is credit being limited by banks, but also as credit insurers take a much more aggressive stance on limits, many companies are seeing credit available from suppliers significantly curtailed.  Many electronics businesses are facing a potentially terminal ‘double whammy’."