It was the Small Business Advice event at the beginning of the month, which created a great opportunity for freelancers and Limited company contractors to gain valuable advice on what they need to do to get a business bank loan.
After recent independent research has shown that around three in ten small firms are refused finance each quarter, the Federation of Small Businesses (FSB) and the British Bankers’ Association (BBA) have teamed up to offer the best possible advice.
The two organisations have recommended that in order to have the best chance of having a business bank loan, you must make sure you have a clear business plan to give the lender confidence in the projections made, ensure that you understand key numbers such as turnover, profits, existing debts and showing how the debt will be repaid; and be honest about what the money is for and how much is needed.
John Allan, FSB, National Chairman, said, “The bank will base their decision on the information supplied to them, so making sure that it is robust is vital. We know that banks turn an application down because they don’t think the business will be able to repay it or because the business hasn’t properly demonstrated how they can repay it. These tips should give small firms the best possible chance to get finance so they can grow and help sustain the economic recovery.”
“Businesses that are refused finance can appeal the decision. The latest figures show that many firms that do appeal have the decision overturned which is great news. We would encourage more firms to look at the process.”
Irene Graham from the BBA added, “The UK’s banks are currently offering some of the lowest interest rates in history.
“If you run a business with a good business plan and want funding, our message is go and talk to your bank. There should be no doubt that now is a good time for businesses to go and see their bank if they want to borrow.”
If you have any questions about contracting or would like further tax and Limited Company advice please contact our New business team on 01442 275789 or email firstname.lastname@example.org. You may also find our Contractor Tax Guide useful.