Cash is king for small businesses in the downturn

An interesting piece in The Telegraph suggests that small businesses are looking to maximise their cash balances as a key part of surviving the economic downturn…

Small businesses are focusing on making sure their balance sheets are as strong as possible,according to research from Lloyds TSB reported in the Telegraph.

An interesting quote from a Lloyds TSB representative:

“We are taking record levels of deposits from businesses. What it says is that businesses are looking to conserve cash. Maybe they are cutting back on investment spending or maybe employment spend. They are looking forward and seeing lower profits so in the short term they are being careful about their businesses today,”

Sounds like a very sensible strategy to me.