How best to approach banks for credit facillities

The Telegraph’s Doctor Biz –  Guy Rigby provides advice on how best to approach banks for credit facillities.

Q: I run a small, but fast growing distribution business and I rely on my bank for support. Given the widely reported credit crisis, should I be worried about the renewal of my facilities?

A: There is certainly cause for concern but if your request for finance is timely and well prepared you stand a better chance of gaining your bank’s support.

The lending process is undoubtedly becoming more rigorous and the cost of borrowing is set to rise. Banks need to re-build their balance sheets and are therefore seeking to increase lending margins, fees and toughen covenants. Businesses seeking new or extended banking facilities could have more difficulty than those looking to renew facilities, but in general, the same rules apply.

You should therefore consider your ongoing cashflow requirements and arrange financing much earlier than has previously been necessary to avoid experiencing your own “credit crunch”.

Providing a well thought through credit submission, addressing the issues which are critical to lenders as early as possible should help you to negotiate better terms and within a shorter time frame.

Make sure that your presentation is as detailed and realistic as possible; showing that you understand the risks and know how these can be mitigated. Having said this, you need to focus on the positives of your business as banks are obviously more wary of risk at the moment.

Remember that impressions are generally regarded as reality, so don’t create a bad one. Be consistent in the information you provide and give reliable supporting numbers. Poor quality financial information may lead banks to assume the worst so avoid this at all costs. You should also be consistent in the information you provide and give reliable supporting numbers.

Dealing with your business’ finances may not be your main focus but in this climate it is essential to adopt a professional approach to renewing debt facilities, otherwise you could be faced with unnecessary delays which may have a detrimental impact on the long term growth prospects of your business.

Guy Rigby, head of entrepreneurs at accountants and investment management group, Smith & Williamson

Source: Telegraph

Which Bank Would You Like To Be in Bed With?

Finding a Bank for your Business in the UK can be a defining moment for you and your business. In our selection of banks, we have attempted to outline for you a number of High Street and Private Banks offering business accounts.

One of the golden rules of approaching a bank is that at the onset it’s important to talk to the bank in question at an early stage to see what they can offer you. Don’t be afraid to shop around and negotiate. The key to any success is having all the information at hand, and take notes in your meetings with the bank representative, and ensure that you have put the date and name of the person you are in the meeting with.

We have provided you with key High Street and Private Banks for your considerations with their services outlined in the respective Banks own words. This is followed by a link to an independent site offering reviews by users.

Abbey National Business Bank Account
“Business banking made easy – Simply the best….Abbey business provides a welcome alternative to the established approach to business banking… focused on the real needs of small and medium-sized businesses. As a result, we offer low-cost – or no-cost – bank charges and pay interest on any accounts in credit. Our bank and deposit accounts are easy to access and simple to operate. And our telephone and e-banking services are available 365 days a year from anywhere around the world”. To read in full, click here.

For an independent review of services, click here. 

Alliance & Leicester Business Bank Accont
“ Business banking for start up businessesIt is tough starting a new business, whether it’s managing production, distribution, suppliers or finding new customers. So wouldn’t it be great to know that you’re getting great value for money for your start up business banking, allowing you to concentrate on making sure your start up business is a success. Business Builder Current Account – We offer a range of start up banking products for your start up business, designed to help your business idea become a reality”. To read in full, click here.

For an independent review of services, click here. 

Bank of Scotland Business Bank Account
“Our Business Current Account pays a great rate of interest, can be managed over the phone, online or through your local branch.  The main features of our Business Current Account are indicated below;

Great rate of interest on all credit balances. Manage your account via Internet Banking and/or the phone or through the growing number of branches throughout the UK:
A promise of ongoing good value; No hidden costs; Access to a Relationship Manager”
To read in full, click here. 

For an independent review of services, click here. 

Barclays Business Bank Account
“Starting a Business – Starting a small business is exhilarating and exhausting in about equal measure. Let us take some of the strain. We’ve got all the banking services you’d expect and some that you wouldn’t, like free advice from local experts. It’s true! We want the best start for your business, that’s why we’ll arrange free consultations for you with a local accountant, marketing professional and solicitor”. To read in full, click here.

For an independent review of services, click here.  
 
Cater Allen Business Bank Account
“One of the leading specialist banks in the UK – Whether you’re a Private Client, a Professional Adviser or a Business Account holder, we offer a range of innovative accounts to suit your specialist needs. All our deposits are fully and unconditionally guaranteed by Abbey National plc, which is part of the Santander Group, one of the 10 largest banks in the world”. To read in full, click here.

For an independent review of services, click here. 

Clydesdale Bank Business Account
“At Clydesdale Bank we’ve designed our approach to banking to be as uncomplicated as it is efficient: one contact, one location, one aim; these are the key principles of our refreshing and flexible approach to Business and Private Banking that we have developed. Delivered to you through your local Financial Solutions Centre, it combines traditional levels of personal service with the best of today’s specialist skills and facilities”.
To read in full, click here.

For an independent review of services, click here. 

Co-operative Bank Business Account
“At The Co-operative Bank, we offer a wide range of current accounts to cover all your business banking needs. You can bank with us safe in the knowledge that your money is making a positive impact on the world around you. We remain the only bank to give you a say in where your money goes with our Customer led Ethical Policy”.
To read in full, click here.

For an independent review of services, click here. 

HSBC Business Bank Account
“Business Current Account (for businesses with a turnover below £500,000)
support, information and up to 24 months free business banking ”.
To read in full, click here.

For an independent review of services, click here. 

Investec Private Bank Account
“At Investec Private Bank we partner with our clients and are committed to providing them with wealth creating opportunities. We share their entrepreneurial flair and are active in a broad range of markets including: cash deposits, specialised lending, property finance, investment management, growth finance and trust services. With offices in London, the Channel Islands and Switzerland as well as Australia and South Africa, we give a truly international perspective and create innovative financial strategies that assist our clients in achieving their goals”.
To read in full, click here.

For an independent review of services, click here. 

Lloyds TSB Business Bank Account
“Our Business Extra package for new start-ups: Let us help you – setting up an online business. Building a website will allow you to reach your customers 24 hours a day, 365 days a year. This guide takes you through the first practical steps you need to take to put your business online”. To read in full, click here.

For an independent review of services, click here. 

Natwest Business Bank Account
“Choose the account that suits your needs. You’ll get a wide range of benefits including access to over 1,600 branches and our cash machine network. And if you need some help, you can have a local, face-to-face or telephone-based Business Manager”.
To read in full, click here.

For an independent review of services, click here. 

Royal Bank of Scotland Business Account
“Why bank with us? At The Royal Bank of Scotland we know all about the challenges facing business. That’s why the business staff at your local branch will get to grips with your business and help you get the most from our products and services”.  To read in full, click here.

For an independent review of services, click here. 

Wachovia Business Bank Account
“Being a small business owner is rewarding but sometimes doesn’t leave much time for the daily management of finances. We’ve got ways to help with bank accounts that save you money, stabilize your expense tracking, and make the daily management of the books less time consuming”.
To read in full, click here.

For an independent review of services, click here. 

Business Link, a Vital Resource for Business Finance

Business Link provide practical guide for business and in particular they have a clear remit to assist new and establish businesses develop their skills in fund raising. A number of our clients have worked with Business Link where successful funding and financial partnerships have brought their business security.

Business Link can assist you with putting together a business plan with which you can approach banks and business funding to attract investors. Of course the success with any of these will depend on your business plan and the vision within it.

Buisness Link states that a “ business plan is essential for your enterprise. Whether your business is starting up or established, the business plan is the roadmap for future development.

It is a key document when you are looking for business funding – whether applying for a simple overdraft or looking for new investment or capital.

This guide explains how to present your business plan to a variety of people, including potential investors, shareholders and your bank.

The business plan helps them understand your vision and goals for the business, how you are going to spend the invested or borrowed money, and how this will benefit the business and potential funding providers.

It is the first source of information that most providers of funding see about a start-up company and is crucial in getting their attention and interest. This guide sets out the key elements that they will be looking for.”

Click here to read further on this vital resource

Free Funding Advice at J4b Grants

J4b Grants is a very effective and sympathetic site for businesses and the voluntary sector looking for intelligent funding information.

Since its inspection in 2000, j4b has developed a comprehensive set of tools and knowledge to further the needs of companies, groups and individuals. J4b Grants main business interest is supplying business and community with support systems.

Essentially it is an information service company that brings insightful and effective research, information and technology solutions. It is an international company with offices in the UK, Ireland, Netherlands and the USA.

The introduction to j4b states that “j4b’s clients range from Central, Regional and Local government to social enterprises and voluntary and community groups. Our expertise lies in the dissemination of complex economic development support information through the delivery of our range of off the shelf and bespoke tools. j4b’s main strength is that we work closely with our clients to ensure that not only are their objectives met but their expectations are surpassed”.

Click here to learn more about j4b.

J4b Grants offers comprehensive information on funding, a funding search facility, funding overviews, how to approach deadlines, steps for funding success, regular news updates, resources and a resources centre. Further, j4b Grants has a regular newsletter that individuals and business can subscribe to.

Click here for information on registration

SEEDA, a funding agency for new & established businesses

SEEDA essentially assist upcoming and new small to medium size companies attain financial support through government funding or by matching established businesses as investors.

In the South East, the Business Link service is run by SEEDA and operated by six Business Link Providers (BLPs), offering points of access into the service for the following areas:

Berkshire
Hampshire and Isle of Wight
Kent
Milton Keynes, Oxfordshire and Buckinghamshire
Surrey
Sussex

“The core Business Link offer has evolved into an impartial IDB (Informing, Diagnosing and Brokerage) service, designed to support the development of small and medium-sized businesses, by:

• Providing them with relevant, up-to-date and timely information 
• Diagnosing their particular needs 
• Brokering businesses to the most appropriate sources of specialist support available – from the broadest range of public, private and voluntary business support services 
• Monitoring their ongoing needs to ensure they continue to get the help they want

Anyone running a business or thinking about becoming their own boss, can access information, advice and support.”

Click here to read further