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August 2013

GET THE FIGURES IN CHECK FOR AN EASIER LENDING PROCESS


Bob Bain, Managing Partner

Bob Bain, Managing Partner at Hall Morrice, says financial experts can guide businesses in the right direction when it comes to approaching banks for finance


With many companies expecting to raise finance at some point during their life-span the bank is often the first point of call. Businesses may require a facility to assist with expansion or development plans. Traditionally, good relationships with bank managers were the norm and these personal relations were at the crux of securing finance. However within recent years, banks have been more cautious when it comes to lending and now businesses are required to go through a stringent process to acquire funds.


Following the collapse of many global banks in 2008, for surviving banks the willingness to lend has been minimised. SME's have been particularly hard-hit by banks, due to the fact it is often more difficult for smaller organisation to prove their ability to service the debt. This has been named as a core issue hindering economic recovery and means that many of the businesses most in need of borrowed money struggle to receive it.


For many businesses contacting the bank for a facility can be a daunting prospect, with business owners feeling intimidated by the rigid process involved in accessing finance. They may have a strong case for further cash injections but are unsure what figures to present to a bank to make their case as persuasive as possible. Owners may be unaware of the correct method involved in securing funding from the bank and might be confused about whom to approach for help. This can be problematic if a cash boost is urgent or necessary.


Bob Bain, Managing Partner at Hall Morrice, comments, "Despite the fact that banks have rigid procedures in place, raising extra capital from lenders is not a difficult procedure for the right business requiring cash for the right reasons. Many businesses have justifiable reasons for requiring capital but don't know how to present them to the bank in the best fashion."


Bob Bain, Managing Partner at Hall Morrice, comments, "Despite the fact that banks have rigid procedures in place, raising extra capital from lenders is not a difficult procedure for the right business requiring cash for the right reasons. Many businesses have justifiable reasons for requiring capital but don't know how to present them to the bank in the best fashion."


Bob explains, "Banks are often sceptical of organisations' plans however they are facing pressure from governments to try to be more supportive. This means that banks will often favour companies which have a business plan and package that all stack up, which is achievable with the right guidance. Financial experts can guide businesses in the right direction and ultimately increase their chance of being successful at raising finance."


Businesses can seek guidance from corporate finance advisors to ensure the business funding needs are met. A good advisor realises the challenging market where funding has become more scarce as businesses need to ensure their funding proposition is introduced in the best light and that the funding opportunity has been thoroughly planned and prepared to ensure there is the maximum chance for success. And the time to think about this is now. It is often beneficial for businesses to premeditate circumstances which could arise and potentially throw them off-course. Scenarios requiring a fast cash injection often arise unexpectedly, thus it may be worthwhile thinking about what approach you would take today, rather than tomorrow.



Hall Morrice, founded in 1976, is one of Scotland's leading independent firms of chartered accountants and has offices in both Aberdeen and Fraserburgh. Based at 6 & 7 Queen's Terrace in Aberdeen, Hall Morrice can be contacted on 01224 647394 or at accounts@hall-morrice.co.uk.


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