Business warned after ruling

A LANDMARK ruling in the British House of Lords could have a damagingaffect on both the cashflow of small businesses in Ireland and their ability to secure bank loans.

The ruling in last month’s Natwest v Spectrum case means banks will lose their right to a place at the front of the queue for repayment when businesses crash - making it more likely they will require additional security from small businesses in the loan process.

President of Association of Chartered Certified Accountants (ACCA) Ireland Gerard Loughnane said: “The ruling makes it likely that banks will be stricter when drawing up the terms of loans and this could have a serious effect on small firms’ liquidity.