SMALL FIRMS SHOULD BE THINKING BIG
At the beginning of 2018 there were 5.6 million small and medium-sized businesses, accounting for 60% of all private sector employment in Britain, according to the Federation of Small Businesses.
SMEs are the lifeblood of the UK economy and are growing in importance. The Government has said that effective provision of finance is key to their future and continued growth.
High street banks have a huge role in helping businesses to grow, and at the start of March this year Barclays announced a dedicated £14.7billion SME lending fund.
We spoke to Ian Rand, chief executive of Barclays Business Banking, to hear his tips about how small firms can impress their bank manager to help secure any funding they may need: What should an SME business plan look like?
During the loan application process, most banks offer guidance on your business plan and will say what information is required, so do your research online and carefully consider each question. One of the most important sections is your financial plan, as banks need to be confident that your business can afford to make repayments.
How much money do you need? Consider all costs and work out exactly how much your business requires. Be realistic with this – and don’t go too small as you don’t want to have to reapply for another loan too quickly.
You’ll also need to work out the type of loan you need (ask about the options if you’re not sure) and describe how the loan will be used, such as for investing in equipment or supporting the business’s cash flow.
It’s a two-way conversation Banks want to help support businesses but you need to prove the credit-worthiness of your firm by demonstrating you are a trustworthy person to lend to, and explaining how your business will make money. Do ask questions about anything you are unsure of, and of course you shouldn’t be afraid to negotiate.
Money is not all your bank should offer you – relationship managers will have a network of accountancy, legal and marketing professionals who they can connect you with. So ask for the help you need – we all want to help British firms to grow.