SMALL businesses are being urged not to take no for an answer when approaching banks to borrow money.
Accountant Nigel Woodhouse said local sole traders and companies were among victims of the £1 billion shortfall in lending to small businesses but that situation could change by following some simple ground rules.
Nigel, who runs TaxAssist Accountants in Doncaster, commented: “Banker-bashing seems to be a national pastime at the moment and it is right that pressure is put on the banks to support small businesses which are the backbone of local economies. But there is also a great deal that business owners can do themselves to present a strong case and swing the lending decision in their favour.”
The company has now put together some top tips for Doncaster small businesses looking for finance:
1, Work with your advisers to produce a clear business plan and cashflow forecast backed up by reliable evidence and a good track record.
2, Banks will expect to take some form of security and see at least 30 per cent of your own cash injected into the proposal - if you do not have security available, enquire about the Enterprise Finance Guarantee Scheme.
3, Show that the borrowing requested will be paid back and that it’s enough to run the business and fund the owner’s living costs
4, Never under or over borrow: under borrowers could be forced to go back to the bank within a year cap in hand; over borrowers pay more in interest than they need to.
5. Keep in touch with your bank and provide them with up to date information including good news and bad news - banks do not like surprises!