CCR World Magazine

USA - Credit managers are a bit more optimistic going into 2010, but businesses in the Raleigh-Durham area can still expect to have a tough time getting credit, at least until the current surge in bankruptcies subsides.

That’s the conclusion of a December index survey taken by the Columbia, Md.-based National Association of Credit Management, which represents about 19,000 business credit and financial professionals worldwide.

The index score, standing at 52.3 in November, climbed slightly, to 52.9, in December. A score above 50 indicates the economy is growing. A score below 50 indicates the economy is shrinking.

“This is hardly the kind of advance that provokes celebration, but given the gloomy assessments made about the 2009 holiday season, the gain is certainly preferable to what had been anticipated,” says NACM economist Chris Kuehl.

The reasons for the spark of optimism included seasonal retail sales numbers, which showed an unconfirmed gain of 4.5 percent over last year, and an increase in dollar collections and credit extended. Another element showing promise, according to NACM, was a decline in the number of credit applications being rejected.

On the negative side, the trade group says, is the continuing raise in the number of bankruptcy filings.

“There have been more bankruptcies and that poses some long-term problems. The growth of bankruptcy activity is not unexpected at this point in a recession, but until these are worked through, there will be hesitation in the market to extend credit to any but the most healthy companies,” Kuehl says.