Pay-down overdrafts
A few days ago a perturbed colleague emailed: "I now know what 'payable on demand' means: my bank is doing it to my overdraft".
I've never forgotten a documentary filmed during the tail-end of our last recession: it followed the declining fortunes of several bosses to hitherto healthy mid-to-small sized companies.
They were forced into administration because banks suddenly called-in their overdrafts.
Debt collector recruitment up
I remember a friend casually mentioning how the finance company his girlfriend worked for was heavily recruiting debt collectors just weeks before that recession became mainstream news.
The Telegraph yesterday reported that whilst Gordon Brown is in New York to add his two penneth to the panicked debate on how to deal with the financial crisis (notice how 'credit-crunch' has been demoted?):
John Hutton, the Business Secretary, [is] back home trying to persuade UK banks not to cut off loans to small businesses. The two are dealing with the macro and micro ends of the same problem, but both are important.
As 'Apocalypse now' hits the US, the picture in Britain becomes dimmer - Telegraph
It goes on to reveal how Bradford & Bingley is sacking around 300 staff and employing debt collectors - clearly not a bank expecting to sell many loans any time soon.
Of course, we all know how Northern Rock did the same after nationalisation, and how they have since aggressively chased indebted homeowners into the County Courts.
And today, HSBC has announced it is culling 500 UK jobs.
Becoming less vulnerable
If my colleague's recent experience is anything to go by, it's likely other lenders are doing the same.
If you can, pay-down overdrafts - and anything else payable-on-demand - as fast as you can before their computer algorithms run across customer bank accounts searching for "vulnerable" risks.
Don't forget, they may well be doing the same to the accounts of your clients too.
[Added (Sat 17th Sept 08): looks like this phenomenom has visited JJB Sports:
HBOS earlier this week increased JJB's repayment terms on the £15m loan by £450,000 a year.
JJB accuses HBOS of 'highway robbery' - Telegraph]
