Thanks to the current state of the economy, it is hardly surprising that lending to consumers and business is at an all-time low. A major problem is the unwillingness of banks to lend to one another.

"What's changed lending is the availability of funds between banks," confirms David Bunker, director of Close Print Finance. "A lot of foreign banks have left the market and inter-bank lending has slowed down - it was virtually frozen at the height of the Credit Crunch."

Printers are in a highly vulnerable position right now. The industry has always been considered a high-risk sector due to the rapid turnover of companies opening and closing. This makes it less likely that a loan will be approved. As a result, many printers are weighing up invoice discounting, but be warned: due to interest rate rises implemented by finance houses coupled with a reluctance to lend to the same levels as they have done previously, printers are essentially paying more for less.

Familiar territory
With few banks willing to lend, Close Print Finance says it's seen an increase in business. "A lot of what we're doing now is what we were doing back in the early 1990s in terms of trying to help the industry grow," says Bunker.

The market has slowed on mergers and acquisitions, as well as investment in new equipment. Instead printers are geared towards restructuring to keep business afloat. This may be through refinancing equipment in order to secure a much needed cash injection.

"We are acquiring refinancing deals from other banks," says Bunker. "We get a lot of requests from customers with high repayments on new equipment that they bought five or six years ago, but they are finding the repayments out of step with their business now."

The insurance market has not been as badly affected by the turmoil in the market. "We have faired better in the current climate," confirms Charles Thomas, product development manager at RK Harrison Insurance Brokers. The reason is that a lot of printers are starting to look at what insurance they have in place. However, Thomas adds that "costs have increased for some businesses but those that haven't had a number of claims are not affected".

Whether financing or insuring, it's good to "choose a provider that properly understands the print industry and offers print specific products", advises Thomas.

WHAT'S NEW IN FINANCE AND INSURANCE

• In January, business secretary Lord Mandelson launched the Enterprise Finance Guarantee, a scheme whereby the state would guarantee £1.3bn of lending for businesses with turnovers of up to £25m
• In April, new proposals designed to give firms entering administration or a Company Voluntary Arrangement (CVA) access to new finance were considered by the government. The proposals were released in the full Budget Report
• In June, the CBI said there had been a notable increase in availability of finance for factoring and invoice discounting and for overdrafts over the previous three months
• This month, an increase in both secured and unsecured lending to small businesses is predicted by the Bank of England. In its quarterly Credit Conditions Survey, the Bank said that the availability of unsecured credit to small businesses had also increased in the past quarter. The BoE warned defaults were likely to increase in the coming quarter resulting in higher lending prices being offered by banks