At one time, if you wanted to borrow money for your business you’d pick up the phone and call the bank manager at your local branch. The chances were that he’d have been there for many years, and he’d know you and your business reasonably well.
However, times have changed. Businesses with annual sales under £5m will rarely have a relationship with their bank manager, which means that finding finance is no longer so simple.
The Government has encouraged the Banks to refer customers to online funding platforms for commercial finance, where you’ll find a plethora of lenders backed up by automated call centres. All very well and good, but how do you know that you’ve selected the best option for your business?
You’ll know that here at Jones Harris we have a wide network of professional advisors who we can call upon, with knowledge about pretty much anything which is business related, including people who know how to source business finance.
If you’re looking for funding for your business we can put you in touch with a Commercial Finance Broker – these professionals have access to a whole range of lenders and, together with knowledge and understanding of your personal circumstances, can provide a personal service which gives the best advice for your own business. Of course we would also refer you to a firm which is regulated by the Financial Conduct Authority and a member of the NACFB.
Talk to Jones Harris first
Don’t forget that as accountants and advisors to your business, before you get to the point of sourcing finance, you should also talk to us here at Jones Harris with regard to a business case for the proposed borrowing. Indeed, it’s also possible that we might know of sources of grant funding or even government sponsored schemes which are far more attractive than normal commercial lending.
We’ll also be able to help you to put a business plan together, because even though the way in which business finance is sourced and awarded might have changed, what hasn’t changed is the lenders requirement to undertake an assessment of the business.
In fact, lending institutions continue to use pretty much the same criteria that they’ve always used when deciding the outcome of applications, including the suitability of the applicant, how much is being borrowed and why – will it add value/generate income, how will the borrowing be repaid, and of course is any security available.
The need for financial information
You can see that in order to answer these questions lenders will need financial information.
Some of that will come from your own accounting systems, but there will be a requirement for your accountant to provide additional information which could include:
– Annual accounts
– Management accounts
– An up to date list of aged debtors and creditors
– An up to date asset register detailing the identity of the asset, those assets subject to finance agreements, and the finance outstanding
– Details of the last 3 months Bank statements
– Details of the last 2 quarters VAT
– Cash flow forecasts
Make the right decision
You’ll see from this article that borrowing money for your business is not something which should be done quickly or lightly. Make the right decision and make it carefully with the help of qualified professionals – we’re here to help and always available for a no-obligation chat.
Remember – here at Jones Harris we’ll help you to understand your business and produce the information which you need to run it.
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