Funding advice for small businesses

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Bedfordshire small businesses are being urged to play by big business rules in order to get their share of increased bank lending.

Figures published by the Bank of England, recorded a £720 million increase in overall net lending to non-financial businesses – the fastest growth in business lending since January – but a £383 million decrease in the share allotted to small and medium-sized companies.

Dave Masterson, who runs TaxAssist Accountants in Leighton and Dunstable said: “Big businesses have whole departments dedicated to data recording, financial forecasts and business planning, so are able to tick all the bankers’ boxes when approaching them for loans.

“But Bedfordshire small businesses, which have a strong business case, can open the door to vital funding by playing by some golden big business rules.”

TaxAssist Accountants advises a number of local entrepreneurs on the financial planning and reporting tools they need to access finance in order to sustain and grow their business.

Dave has put together some top tips for small businesses looking for growth finance:

> Work with your advisers to produce a clear business plan and cash flow forecast backed up by reliable evidence and a good track record

> Understand your numbers as the banks will probe and practice presenting your business plan before your meeting

> For loans over £25,000 banks will expect to take some sort of security, typically a second charge on a property or other asset. Where security isn’t available, the bank has the option of the government-backed Enterprise Finance Guarantee Scheme.

> Show that the borrowing requested will be paid back and that it’s enough to run the business and how you will fund your living expenses

> 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

> 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!




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