There has been a lot of recent press highlighting the plight of small and medium size businesses and the lack of funding and support available in the current uncertain economic climate. There is an element of truth in that overdrafts are on the decline, and that lenders are looking closely at the types of sectors they will support. We have found that some businesses have had their funding lines reduced or even removed completely due to the funders policy decisions to either restructure borrowing or move away from a particular sector. It’s not all bad news!: We have found that there are funders out there with money to lend, in fact we have been approached by a variety of funders looking for ‘deals’. Ignoring the current economic climate it has always been the case that business owners should carefully select the right finance option for their business. Some of the issues businesses are now facing can be a result of them having facilities which are not the best match for their particular requirements, consequently any tightening of lending policies affect businesses very quickly and quite severely in some cases. There has always been a sector of the business finance market that offers specialist finance lines, however many businesses are not aware that they exist. How do small and medium sized businesses evaluate what they need and how do they apply for finance?: The key ingredient for accessing finance is a well thought out application with supporting documentation. Funders always like to see a business plan, supporting the application for finance along with up to date financial information such as year end accounts and management accounts. Business plans don’t have to be war and peace either, a clear concise summary of the requirements is often enough to gauge if there is interest from a funder which can then lead to further requests for information, the plan can then be developed. It is also important to understand the benefits and limitations of any particular finance product, and apply for the right finance product to suit the businesses requirements. In some cases the facilities can be sought from different funders to maximise the effectiveness and more importantly business will not be over reliant on one source of funding which can increase the risk to both the funder and the business. As a general rule it is important to distinguish between working capital facilities for trading and infrastructure costs such as marketing and staff. Infrastructure costs do not give an immediate return, however are essential for a growing business, these types of costs can be financed by other facilities such as loans or investment. So in summary, finance is available to the small and medium sized business, however securing funding lines will depend on a well thought out application selecting the right finance product for a businesses particular requirements. Its is equally important to understand what you are committing yourself and your business to, are the rates competitive, are any guarantees and security required and are they proportionate to the facilities being offered? We wish you well in the current economic climate, should you feel that sourcing finance is something that you would like further information about please do not hesitate to contact us on 0771 831 9359 or 0161 773 2006 alternatively email us at [email protected].