Organisations heavily involved in lending to the recruitment sector may look to reduce their involvement in light of the credit crunch, according to Kevin Barrow (pictured), head of the recruitment group at Blake Lapthorn Tarlo Lyons solicitor.

Barrow said: “We believe that some organisations most heavily involved in lending to the recruitment sector may look to reduce their exposure, leading to many recruiters needing to refinance when their current arrangements expire.

“Many directors in the sector may start receiving requests from the lenders for personal guarantees. Worst still some may be caught out on breaches of covenant, leading to lenders pulling the plug without much warning.”

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