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KEEPING THE BANK ON YOUR SIDE
Page 47
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The first thing is not to stop talking to your bank. Even if you are having cashf low problems and are worried about your lender's response, avoiding the conversation is the last thing you should do.
A spokesman for Barclays business section, which handles companies who have up to £1m turnover, says. "A big problem in the last recession was the perception that banks had stopped lending, so the two sides stopped talking. That caused problems for a lot of businesses.
"We would recommend banks and customers both make a concerted effort to have that conversation, whether about new lending, or if you are predicting problems The earlier you talk to your bank, the more likely you can find a solution."
The spokesman adds that Barclays business unit has lent more to businesses in 2008 than in previous years, and that is set to continue. And nor has its lending criteria changed...
"There's a lot businesses can do when it comes to approaching their bank for finance," says John Davis. marketing director at Barclays. "As with most things, preparation is the key. Keep in mind that what a bank like Barclays is looking for is evidence of how the business will support its borrowing over the length of the loan.
"This means bringing in key financial documents — the top three being the last two years' financial accounts, the economic forecast for the next 12 months and a personal budget planner.
"Entrepreneurs should also be prepared to answer questions about how much finance is required and what it's for, the unique selling point of their business, and also have some understanding of their competitors."
"Of course," he continues, they should also be ready to talk through how their business works, and plan how they would react if that business took a turn for the worse.
But don't discount passion, we don't. We want to know that a customer is serious about their business. It takes effort to make a business work, and a passionate entrepreneur is going to make that happen"