Posted: Tuesday 4 October 2011
We have now endured over three years of difficult banking: raising new funding is still becoming more challenging and banks remain very wary of the risk of future defaults. Whilst the government is encouraging lending, it is imperative that the banks maintain a proper and strong balance sheet and only lend to people and businesses who have demonstrated ability to repay the loans on time and in full. We certainly do not wish to see another return of risky lending. That said, as with all things, there has been a swing in the opposite direction with obtaining and maintaining finance with banks becoming more and more problematic.
We act for numerous banks and we can assure you that they are extremely keen to lend money to viable businesses and to help them thrive and grow – although it may not appear so at the time! If you have current funding in place then there are some several simple steps that you can take to ensure that this is maintained – particularly if you have the benefit of a loan which is linked to the base rate.
Simple steps to follow for smoother banking:
Currently there are many new lenders coming into the market; however this will not see a surge in new lending. But, if you have a good and viable business, there should be no reason why you will not be able to obtain alternative funding.
So in summary the key is communication – it is not a good thing to sit and hope that the problem will go away and it really it is much better to go and speak with the banks early on.
Contact Susan Younger in our banking team to discuss this further.