How to combat business failures

Abstract

Analyses, from reported cases, the causes of failures in business and the lessons that can be learnt. Explains risk management and insurance, the differences between salaried employment and self‐employment, business size, borrowing and financing the business. Gives some case studies which focus on lending to property developers and covers issues relating to the business of the developer, loan recovery, overcommitment and damage limitation, and borrowing to repay past debts. Concludes that lenders in these cases seemed relatively unconcerned with borrowers’ abilities to run their businesses properly, why they wanted the money, or the success of the businesses; they were satisfied with sureties of property as security, while judges seemed reluctant to penalise their irresponsibility. Recommends how this should be remedied.

Citation

Hemraj, M.B. (2004), "How to combat business failures", Journal of Financial Crime, Vol. 12 No. 2, pp. 178-184. https://doi.org/10.1108/13590790510624891