A recent survey carried out by the Federation of Small Business, indicates that the majority of business owners still hold the view that “the banks are not lending”.
Statistics from the survey showed that 41% of businesses which had applied for finance in the previous 3 months, had been turned down. Nearly 73% said that access to credit was “difficult” and only 1% rated credit availability as “very good”.
In contrast, local banks tell us they are very much open for business and have various case studies demonstrating businesses they have supported. In addition, the Bank of England and Treasury recently revealed emergency plans to pump further money into the economy – one of the main aims being to ensure that businesses can get the funding they need, in order to grow.
So, against that backdrop, how can your business maximise its chance of getting funding approved ?
1. Do your preparation. Understand your cashflow and breakeven and be prepared to demonstrate that understanding.
2. Keep good financial records, and plan ahead using budgets and forecasts.
3. Put together a well thought-out business plan, based on realistic assumptions, demonstrating the ability to repay the borrowing.
4. Have some contribution of your own to put into the transaction.
5. Keep an open mind about the type of finance you need. A loan or overdraft is not always the only option - asset finance and invoice finance have their places too.
