I've recently found myself between a rock and a hard place. Having left my nursing career two years ago to go into business, I applied for a personal loan when my cash flow dried up. I discovered to my horror that when you have a business account with your personal bank, your credit rating is erased and returned to zero, and it's down to your business manager to decide if you are able to borrow. Before I discovered this, I had applied for a secured loan on my house, extending my mortgage to help consolidate personal borrowing but had been turned down. I then applied for a personal unsecured loan, also declined. Of course, now I've been refused credit before I realised that my business account had affected my credit rating. As my business has run at a loss, this leaves me with no options. It seems that if you have the courage to go self-employed, and the backing of the bank. you have to swim alone as they won't help you when you're trying not to sink. Can you advise me on how to survive when business is slow and borrowing is high?

Alison Taylor

I do sympathise with your situation and, although it’s probably no consolation, I’m sure there are many others in the same boat as you. In any downturn – and this one is looking rather severe – lenders do become understandably cagey about new lending. At Experian at the moment, we are certainly seeing an increase in the number of people checking their credit reports because they have been refused credit of some sort. From what you say it does appear that, like you, your bank is worried about your business. As a result, you can understand their reluctance to extend further credit. Assuming you have exhausted all options with your bank’s business manager, I wonder whether the British Bankers’ Association might be a useful port of call. The BBA website (http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=1538) certainly includes some useful guidance to help SMEs through the credit crunch. Alternatively, you might try discussing your situation with an adviser at Business Debtline (http://www.bdl.org.uk/), the sister organisation of the free debt-advice charity National Debtline. I visited their offices quite recently and, after listening to several calls, I can happily to report that they provide a truly outstanding service – for free. Good luck.