Green shoots or just some moss?
Speaking with a local bank manager from HSBC yesterday at the Hounslow Chamber of Commerce lunch, he said he was amazed at resilience of the economy in his area and at the number of new business accounts that were being opened. Indeed according to an article in Business Matters magazine owning a business is good for your health. That is of course as long as you avoid February which according to Paul King of Ark Commercial Finance is statistically the peak month when businesses run out of cash and fail.
Meanwhile a new survey from the Forum of Private Businesses reported that a third of members surveyed actively sought finance during the last quarter but in spite of the government bank bailouts and active lobbying by the SME business community almost half had their applications partially or completely rejected. It is against statistics like this that success of the new Government loan scheme that was announced yesterday will need to be measured.
Of course new money, however it arrives, is to be welcomed, but the challenge for SMEs is going to be to understand and manage the processes that will need to be gone through in order to get that money. It will be still be necessary to produce credible business plans to support applications, and to provide lenders, even those with the comfort of a government guarantee, with evidence that proper financial control, cash management and reporting systems are in place. They are just not going to give the money away, but if the right approach is taken there is a good chance of success. Assuming of course you survive February…….
Antony Doggwiler