It is a slow day in a damp little Irish town.  The rain is beating down and the streets are deserted.  Times are tough, everybody is in debt, and everybody lives on credit.  On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to  pick one to spend the night.  The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.  The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.  The pig farmer takes the €100 note and and heads off to pay his bill at the supplier of feed and fuel.  The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub.  The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.  The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.  The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.  At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.  No one produced anything.  No one earned anything.  However, the whole town is now out of debt and looking to the future with a lot more optimism.    And that Ladies and Gentlemen, is how the bailout package works. 

Peter's Elworthy & Moore has just conducted a survey of owner managed businesses in its client base to guage what's worrying businsess owners at the moment.

Top three, and no surprises here, are the impact of the government spending cuts, current market condistions, and securing funding.    From a corporate finance standpoint our experience is that financing is available for transactions.  But there's less of it about, and the banks are being very careful and thorough in their due diligence processes.  Quite right.  Also for deals that are well structured, with good companies, there is still strong appetite to lend.  Not all bad news.

Other concerns are perennials - competition, tax, red tape, margin pressure, staff shortages, confidence along with less obvious ones such as slower decision making, and IT development issues.

Click here for the full survey