Credit squeeze forces cuts to secured lending

Banks and building societies are reporting an expected cut in the amount of secured lending they will offer after the Bank of England admitted the credit squeeze is set to intensify.

The credit crunch is forcing some lenders to take fewer risks whilst at the same time, the cost of borrowing on the money markets remains high. As a result, SMEs could find it difficult to secure traditional loans or receive overdraft facilities from their bank.

Spring Clean your Finances

With spring time now officially upon us and a new tax year started, there has never been a better time for small businesses to spend some time spring-cleaning their finances to help get their firms into ship shape condition for a successful 2008.

Business borrowing is getting personal

Insolvency practitioners are warning that banks are forcing entrepreneurs and family-run firms to take second mortgages on their homes and offer personal guarantees before agreeing to provide business loans.

Many banks also charged penal rates of interest or refused to extend loans to small businesses unless they agreed to offer their personal assets as security, and in particular their main home.

Blood on the trading floor

Remember the boom in stockmarket flotations, at the end of the last century and the start of this one? That was the time when companies came to the stockmarket for its IPO – Initial Public Offering – armed with a prospectus, a narrative, a prominent bank to manage the offering, and a cabal of venture capitalists hidden off-stage, sniggering, rubbing their hands, and revving the engine of their getaway vehicle. For civilians and non-City people, in a week dominated by all-too-credible stories about economic cataclysm and global recession, that may seem a long time ago. The biggest IPO in history, for instance – what and when was that? AT&T in 2000? Google in 2004?

Seizing opportunities

It is one of life’s certainties that life is full of uncertainties and business life in particular has a habit of presenting us with all kinds of uncertainties – through situations and circumstances, both good and bad, which arise completely unexpectedly.  
We all welcome the unforeseen opportunities. They’re one of the things that make business exciting. Usually we need to act on them quickly because it’s unlikely they’ll recur again.  And if we don’t make the most of the opportunity, someone else will. It could be the chance to buy a competitor’s business or acquire a property that has tremendous future potential.

Carry on Trading: Formal and informal

So you’ve decided you can’t carry on as you are and you’ve decided not to simply inject more capital.
If the business is viable if it did not have debts then you have one set of choices.  If the business isn’t viable even without debts then there are another set of options.
Let us first look at your options if the business is viable, were it not for the debts.  As we discussed last month, your energy levels and attitude to the business are as important as the balance sheet.  Let’s assume that you have energy and you want to continue; essentially, there are two possible approaches: the first is a formal negotiation with your creditors; the second is an informal one.

Why use an accountant?

When you’re starting up a new business an accountant may seem like an added expense that you could do without.  What do you need one for? After all you’ve got a calculator, it can’t be that hard!  Think again –    A good accountant isn’t just a number cruncher, it’s someone who understands how to run a business in today’s economic climate, an experienced professional who will get to know you and your business and will provide you with essential support.
Ultimately your accountant is someone you should regard as a trusted business advisor.  When you are starting out your accountant can help you evaluate your business idea, help you plan for a successful future and make sure you keep proper financial records.

Cash flow crunch

There are so many reasons for businesses to run out of cash.  Sometimes the causes are clear, sometimes it’s a complex web of reasons.  Sometimes it’s been building for a while and other times it’s more sudden.
Either way the effect is usually the same, you find you can’t pay your bills.  It’s a frightening prospect; there is a list of bills on your desk and not enough cash in the bank to pay them.
I remember a friend of mine who works in the oil exploration industry in remote parts of the world, Chris used to get into really scary situations and developed an interesting crises response methodology: “If there is a crisis and you need to respond absolutely immediately (such as using the fire extinguisher) do it.  If not, have a cup of tea and plan your actions”
It is not so different in business.  Is the lack of cash simply because of an admin error, a cheque that has genuinely gone astray (it has happened), or sadly, as is increasingly likely, is there something more serious?  Is this is a short or a long term problem? Remember cash is king, if you don’t sort it, you won’t succeed.

What insurance do i need?

Insurance is an essential aspect of your business, but even the best entrepreneurs can find it confusing. Specialist insurers Bussinesssure are here to make things clearer, and explain the different types of business insurances you should consider: