By Anthony Carty, http://www.cliftonasset.co.uk/

For retailers up and down the country the next six weeks hold the key to their entire year. Indeed, it may determine the very future of their business. With the twin spectres of the rise in VAT and growing effect of public sector cuts, shop owners will be acutely aware that making the most of the coming Christmas season is more important than ever.

A good push through the holidays however may fill the coffers sufficiently to weather what will undoubtedly be a very difficult start to the year.

It was disappointing therefore, that when the British Retail Consortium (BRC) released its October analysis it presented sluggish retail sales growth from the high street. Most worrying its statistics noted that the little growth that was discernable mainly came from increased pricing rather than increased sales volumes.

In fact sales, when inflation was accounted for, actually fell slightly. This is not good news. Banks will be keeping a vigilant eye on their corporate customers as the next six weeks unfold and you can be sure that any sign of weakness will be met with concern given the outlook for the New Year.

As if this wasn’t enough to keep us up at night, UK banks have the largest exposure to the rapidly deteriorating Irish bank crisis, to the tune of more than £143 billion. To protect their already tattered balance sheets, we must assume that the availability of bank lending to small business in the UK will remain constrained for at least another year.

It is a new world in business finance. The traditional routes are drying up, or simply priced out of reach for most SMEs. The world of alternative business funding will continue to grow rapidly in this environment. Business owners will no longer be able to rely on the high street banks and will find themselves looking for solutions that were unknown to them just a couple of years ago.

This next year will call for creative thinking from both borrowers and lenders as each struggle to define their place in the new market. Those who are not prepared to take on board new thinking, new ideas, will undoubtedly be left behind.