Michael Thommes, the managing director of a small company in Dorset, has cut his workforce by 80 per cent in the past year. But even those drastic redundancies have not saved his own job or those of his remaining four staff.

General Finance Centre (GFC), a commercial finance brokers in Poole, is about to go into receivership. Mr Thommes, 46, estimates that the final blow will be dealt at the end of next week.

Much of his small team, which numbered 25 before the credit crunch, had been with Mr Thommes for several years as part of a company that used to make a £200,000 annual profit. It was horrible to let them go, he said, but there was little choice other than to rapidly downsize in an ultimately unsuccessful bid to stay afloat. “They are quite bitter about the situation and haven’t really contacted me. I think some of them have jobs, some of them haven’t. Some are temping where they can but I don’t really know.”

It is 19 years since Mr Thommes established GFC, a time when Britain was on the brink of the last recession. “It was fine compared with now,” he said. This time, “the banks stopped lending and they haven’t started again. Until that changes, problems will continue.

“If there isn’t any finance to arrange, then our customers are let down . . . Banks are pulling products without any notice, or even withdrawing offers.”

That, in turn, creates huge problems for Mr Thommes’s clients, themselves small businesses. Are they also struggling? “Every day” he hears stories of another firm in trouble, he says. But it is the fate of his own staff that bothers him most. “We have had months when we haven’t been able to pay any salaries,” he said. Some employees left with pay cheques outstanding and are claiming against the company, which he agrees is right: “It goes without saying that we wanted to pay them.”

Mr Thommes remains upbeat about his own prospects and plans to establish another business, albeit in a “much smaller way”.

He will need to. A father of three teenagers, he remortgaged his home to plough more than £100,000 into the business.

“The emotional shock was appalling initially. Everyone’s a bit more light-hearted now, strangely,” he said.

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