A group of Birmingham financial organisations is planning a £8 million fund under the aegis of Advantage West Midlands to provide provide emergency finance for small companies running into trouble under pressure from the credit crunch.
Begbies Traynor, a provider of professional services specialising in corporate recoveries said the number of businesses with critical problems - facing winding-up petitions or County Court Judgments requiring payments of more than £5,000 - rose more strongly in the West Midlands last year than in any other part of the country.
These "Red Flag Alerts" by Begbies increased by 43 per cent in the West Midlands in 2007, against a national average of 13 per cent.
Both retailers and manufacturers are coming under pressure from the credit crunch, said John Kelly, who runs Begbies' Birmingham office.
"Businesses are so highly geared nowadays that a little interruption in their business makes all the difference," he added. "There has been some tightening in invoice factoring."
The new fund to provide top-up loans in such circumstances has been discussed in Birmingham for some time, Mr Kelly said.
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