Credit crunch

Customers will have to jump through a few more hoops than usual to get credit during the economic downturn, according to the fourth-quarter 2008 CICA/RBC Business Monitor survey.

The survey of CAs in senior executive positions conducted in November found that of the 38% of companies that extend credit to customers, 38% have already tightened credit policies and half expect to tighten their credit policies in 2009.

As for how companies will go about tightening credit, the survey’s findings suggest that companies were previously lax in applying their existing policies. This will change in 2009, with 92% of respondents indicating their companies will be more strictly enforcing existing financing, lending or credit criteria.

A smaller number of companies will also be imposing additional financing, lending or credit criteria (32%); reducing the number of new customers who receive financing, loans or credit (23%); and reducing the number of existing customers who receive financing, loans or credit (20%).

John Tabone is CICA’s manager of member value and research services