Grahame Latus Chief Executive of Enterprise Answers on close relationships and how they can help businesses grow. - Sponsored Content

Finance, probably the most important tool in your business, yet perhaps one of the most stressful topics of running a business, especially if you cannot access it. Even back in 1625, King Charles I had difficulty accessing the finance he needed from Parliament and we all know how that ended!

Access to finance has certainly evolved since, with banks still playing a key role amidst a rapidly growing market of new ‘alternative lenders’, many of whom are internet based. There was a period when the banks were willing to lend you pretty much what you needed but today it is simply a case of meeting the lenders’ credit criteria, usually without exception.

As a result many businesses today find it challenging to fulfil the bank’s lending criteria with more emphasis from the lender on the performance of your business, the sector you operate in, experience and not forgetting security. But this is not about ‘bank bashing’ but a reflection of how challenging the market place is for businesses to access finance from conventional sources.

I’m a great believer in relationships with businesses, which used to be the fundamental tool of good old fashioned banking when lending decisions were based on judgmental principles. In other words the better your bank manager knew you and understood your business, the better your prospects of securing the finance you needed. However, the banking model has changed and has become less community based resulting in the loss of the ‘local bank manager’, making it difficult to build those fundamental relationships valuable to growing your business. When I left HSBC bank at the end of 2004 there were 28 branches in Cumbria and this number will shortly be down to seven, representing a massive 75% reduction in the branch network for just one bank across our region.

Otherwise businesses have to explore alternative options, mainly via the internet and there are many lenders out there, some familiar and not so familiar names, but watch out, there are some out there to be avoided at all costs. It can be very temping when you’re short of cash and you opt for one of those short term lenders to address your needs who can give you a decision in minutes without actually understanding you and your business.

Our experience tells us these short term solutions can become long term problems when the borrower is unable to pay back by deadline day. However, do your homework on the lender before you make any application or commitment, especially where they are eager to lend!

At Enterprise Answers we put relationship management at the forefront of our engagement with businesses and ensure that the finance we are being asked to provide is appropriate for them. We don’t use credit scoring and our decisions are based on good old fashioned judgmental lending principles.

With the key lending decision makers in our organisation being former Midland Bank employees, we haven’t forgotten the old strapline “come and talk to the listening bank”! So if you are looking for finance for your business, value having someone you can talk to about your growth aspirations or bounce ideas off, give us a call and we’ll be ready to listen.

Web: enterpriseanswers.co.uk Email: enquiries@enterpriseanswers.co.uk Tel: 01768 867118