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Friday, 19/09/2008

A former banker and agribusiness adviser says it will be harder for mining companies and other rural businesses to get loans because of the global financial crisis.

Some Australian banks have admitted they have some exposure to the credit crunch, which has seen various merchant banks and insurance groups overseas struggling to stay afloat.

Financial consultant Mike Carroll says while it's not likely to make them collapse, it will dent their confidence and make it harder to provide finance for new projects.

"Any projects that were relying on a lot of borrowing and relying on a lot of leverages, the banks are going to be extremely cautious about looking at," he says.

"They are going to look favourably on projects that have a clear and strong cash flow, where the promoters and proponents of those projects put in a lot of their own equity."

Source:- http://www.abc.net.au/rural/news/content/200809/s2368930.htm