Santander aiming to lure SMEs with £200m

Santander aiming to lure SMEs with £200m

Santander is looking to attract small to medium businesses with a package of measures designed to boost their growth.

The bank hosted an event in Newcastle yesterday to showcase its Breakthrough programme, which will make £200m available to high-growth businesses with a turnover of up to £10m.

On top of the money, Santander is also providing development opportunities such as international trade missions, visits to successful companies such as Google, and help in attracting and hiring talented graduates.

The Government has contributed £50m to this pool from its Regional Growth Fund.

“One of our major goals is to become the SME bank of choice”, said Santander CEO Ana Botin.

“The group we’re looking to help are the growth champions of Britain. This is where we could offer the most help and have the most impact.”

Read full article.

The UK needs alternative solutions for SME funding

The previous few years have been a rocky road for the UK’s banks. UK SMEs have felt the effects of the stumbles in the banking industry more than most, with bank lending to the SME sector becoming especially restrained in an economic environment that has heightened the need for working capital to support day to day business operations.

However, although generally failing to meet the credit needs of SMEs the big 4 UK banks (Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC still manage to retain nearly 80% of all SME accounts.

Read full article.

For some innovative funding solutions, take a look at the following:

£500k interest free loan

Funding from 0.9-2%

Loan application successes down to 65%

The Treasury has come under renewed pressure to persuade British banks to lend to small businesses after official data revealed a sharp drop in companies’ access to finance.

There was a steep fall in the number of businesses that were successful in their attempts to get loans last year, to 65% from 90% in 2007, according to the Office for National Statistics (ONS).

The data also showed the number of fast-growing businesses that felt banks were now less willing to lend was 15 times higher than those that thought the situation had improved.

Read more: http://www.guardian.co.uk/business/2011/oct/28/small-businesses-failing-loans?newsfeed=true

Banks Aren’t Lending – So What Do You Do?

There are an increasing number of stories in the press about the lack of funds being made available for small businesses.

So what is a small business to do if funds are required to help with growth plans or support cash flow?

Well, in the current climate there are a number of innovative cschemes coming to the market that could well provide alternative sources of funding for small businesses. Recently there have been £500k interest free loans and invoice funding from 0.9-2%; all of which are viable options for small businesses.

If you’re unsure of the different sources of funding that are available, you may find the following article of interest: Different Types Of Funding

Small business lending to become an even bigger problem?

Banks have threatened to raise the cost of borrowing for small businesses. Given the number of complaints we hear that it’s too expensive already, that’s less than ideal.

What do you do when your customers complain that the cost of your product is too high? Presumably, the answer isn’t ‘raise prices even more’. But according to a report by the Bank of England, UK banks are planning to do exactly that, raising the cost of borrowing for small businesses over the next three months or so, despite the fact that SMEs have spent the last few years vociferously complaining that they can’t afford to borrow in the first place. Time for the Government to start cracking the whip a bit harder?

Read full article: http://www.managementtoday.co.uk/news/1078121/small-business-lending-become-even-bigger-problem/

Excited about…not 1, not 2 but 3 business opportunities

Ok – so I’m being a bit greedy and could have spread this out over a few more blogs, but I just can’t wait to get the various messages out there:

1. NABO Networking – I am happy to say that I am one of the first 20 ‘pioneers’ who have a agreed to become a group director in my region (East Northants) for what is (or soon will become) the fastest growing network in the UK.

I know what your thinking: “not another bloody networking group“! Well ‘yes’ but with many benefits that are currently not offered by any other national networking groups such as £99 annual subscription for first time visitors (£150 otherwise), attend any of the national meetings for 90 days with no obligation (timing starts from your first visit) and much more: http://www.paulgreen.biz/nabo-networking

2. Interest Free Funding – with the banks being very restrictive with who they provide funding for – this is a refreshing alternative if you are a business looking for £500k+ funding with no interest. Whilst there may be a requirement for an equity stake in any business considering this as an option – it is the sort of chunk that ‘Vulture’ Capitalists of the likes of Dragon’s Den investors demand, but will be a maximum of 10%. To find out more, email me@paulgreen.biz

3. Invoice Funding from 0.9% – last, but certainly not least, a unique and innovative company that I have recently been introduced to is challenging the conventional factoring/invoice discount market by providing a secure online trading platform for businesses who want to ‘sell’ individual (or more) invoices that are ‘bought’ by investors. As it is a competitive environment – a bit like ‘Ebay for invoices’ the terms are set by the seller and the buyer bids to win, hence the competitive rates (max 2% interest).

In addition, there are no set up fees, no ongoing contract or commitment, no personal guarantees required and other benefits. Contact me@paulgreen.biz for more details.

I hope you agree that it was worth 1 blog for 3 opportunities?

Santander small business lending boosts profits

Santander saw an 11 per cent increase in UK profits in 2010, up from £1.5bn in 2009 to £1.7bn. Lending to small and med- ium-sized businesses rose by 26 per cent from £6.7bn to £8.5bn and retail deposits were up by 22 per cent from £5.6bn to £6.8bn.

Santander UK chief executive Ana Botín says: “We are working towards completing the acquisition of 318 RBS branches, a key step in fulfilling our ambition to be a full-service commercial bank. Our aim is to increase our lending to UK businesses and create new jobs as we open more business centres to serve them.”

Source: http://www.moneymarketing.co.uk

eBay report names and shames banks

Despite assurances to the contrary, many of Britain’s high street banks still aren’t lending to SMEs – at least that’s one of the findings of eBay’s latest report.

The Online Business Index, eBay’s regular barometer of online firms, has investigated the relationship between banks and businesses, finding that one in three SMEs are still unable to access new finance from their banks.

The results are dire: all of the big four banks score poorly, with Santander the only bank to emerge with its reputation relatively intact on the issue of lending. In fact, the number of Santander customers claiming they are unable to access new finance stands at half the level of RBS.

Read full report and rankings here: http://realbusiness.co.uk/finance_and_banking/ebay_report_names_and_shames_banks

Sources Of Finance

How to get money into any business is a problem as old as the hills, so don’t feel that your situation is unusual. There are four main ways of achieving this:

1. Don’t overlook the obvious!

There are things you can do with what you’ve got that will bring money in to the business.

• Is your marketing up to scratch? Re-examine how you bring customers into your business. Run a test before you commit too much money to it. There are a hundred different ways of generating new business, so don’t think that you are applying them all at the moment.

• Are you collecting in your debts quickly? Even a small improvement in your debt collection can be a source of funds for your business.

• Are you extracting maximum benefit from your suppliers? Could you extend credit with them?

• Could you reduce stock levels? Could deliveries be closer to “just in time”?

• Are you sitting on under utilised assets? Do you have a freehold or machinery that you could sell and leaseback?

So look at the obvious things before you start looking elsewhere.

When you’re thinking of approaching banks and financial institutions remember:

• Have a decent plan to show them what you are trying to do

• They want your business. They have sales targets just like you. If you can put up a decent plan they will fight to get your business.

• Don’t leave it too late to approach these institutions. There are various different sources of funds from banks:

• Overdrafts: Never forget that this is a major source of revenue for a bank, and they want your business.

Make sure your bank manager knows what’s going on and they will be a lot more co-operative.

• Lease finance: This enables you to match the costs of buying the asset with the income you generate. However, do read the terms carefully and shop around.

Focus at what happens at the end of the lease as there are many options here.

• Factoring: Asset based debts can easily be assigned to a third party. This means they put you in finds immediately and collect the debt for you.

• Invoice finance: This is the same thing as factoring, except the customer does not need to know. This can be very flexible and do whatever you need.

• Loans: Again, presented in the right way, this can be an excellent source of finance, particularly as interest rates are so low at the moment. The small firms’ loan guarantee scheme may also be helpful in some situations.

3. The Government

Believe it or not, the government wants to help you grow. There are over 1,500 different types of grants available, and it is sensible to seek expert advice in teasing out what may be available. Main types are:

• People based: These tend to be support with training – such as the modern apprenticeship scheme for 18-25 year olds.

• Knowledge based: Various grants are available for research and development.

• Location based: The further you are from London the more likely grants are available. Again, this requires specialist help.

4. External investors

Do not assume that just because you have a good idea others will catch on quickly. Dealing with external investors is all in the presentation. You need something snappy to catch their interest and then well presented detail to hold their interest.

Typically investors can break into three categories

• Business Angels: These are people who have made money who would like to use that money to back others. They will typically invest from a few thousand pounds up to about a million. No hard and fast rules and they can be difficult to find, let alone close a deal with.

• Venture Capital Funds: These are interested in investments of at least £500,000, and often a lot more.

• Other Companies: Another company may well be interested in investing in your company – perhaps with a view to outright purchase in a few years time.

All of these options will want to have a share in your company, and with that comes a loss of control.

Be prepared to discuss this early on in any conversation.…and you must plan

To improve your chances of success in gaining additional sources of finance you must have something in writing. Often the very act of writing something down will help clarify a course of action. It will also help to explain your thoughts to others in a rapid and coherent way.

via UK Business Advisors Ltd | UKBA – Articles: Finance – Sources Of Finance.

Different Types of Funding