In the past six to 12 months, printers have faced the 'perfect storm' of the withdrawal of credit from suppliers at the same time as banks are cutting credit lines.

Speaking at a meeting of key figures within the BPIF's business advice unit – the BPIF Financial Alliance – Richard Gray, commercial director of the BPIF and a director of Vision in Print, said that credit was harder and harder to come by.

"Printers need to be aware of the trends and be radical in the actions they take to adapt to the new credit climate," he said.

The sentiment was echoed by Mark Halstead, red flag operations director at Financial Alliance member Begbies Traynor who said that despite the low base interest rate, there were very few deals in the industry at below 16%.

"Banks are giving money to the sub-prime lenders who assume the risk and charge high interest rates," he said. "A lot of printers are frustrated by the fact that they know that interest rates are historically low but are being offered deals at 20%."

He added that some printers had approached banks for a loan only to find credit lines cut and warned that printers should be proactive and only approach banks "with a plan, not an ambition".

At the same time as credit from traditional lenders has become rarer and more expensive, credit insurance has been in crisis with insurers pulling out of sectors they perceive as high risk.

This trend leaves printers facing the double challenge of having no insurance against bad debts, while at the same time having to switch to paying cash on delivery because their suppliers are unable to insure against them.

Tracey Anderson, managing director of credit insurance broker IRC Europe, a subsidiary of RK Harrison, said that even where companies can get insurance, premiums remain high, despite turnovers falling.

She added: "Expectations have to be managed. Cover is falling to around 70% while premiums are remaining the same and in some cases increasing.

"However, insurers are going to have a problem in the long term due to potential clients no longer needing insurance. Instead businesses are going to the Lloyds of London market to insure their top customers."

The BPIF Financial Alliance was launched last year and is headed up by Marcus Clifford of BPIF McInnes Corporate Finance. It constitutes a variety of companies offering a range of services from M&A advice to tax services.