The Guide to Accessing Bank Finance contains practical informationcovering criteria that banks and lenders use to make their decisions onlending applications.
Some of the key criteria include:
- Character and ability
- Performance
- Conduct of account
- Requirements
- Serviceability
- Security.
The guide also offers a ten-step process to assist in creating aneffective and persuasive business case to support an application to abank. The following areas should be covered:
- Business background: this should include ownership, history, locationand competition.
- Purpose and vision: explain the purpose of your application andprovide clear aims and objectives.
- Risks: show that you have considered and understand the risks thataffect your business.
- Financial awareness: identify the key financial drivers anddemonstrate the robustness of your financial model.
- Accounts: provide historical financial data, including threeconsecutive years' financial accounts.
- How much finance: it is important to establish the correct amount toborrow, allowing for unexpected expenses.
- The right finance: work with your bank to determine the correctfunding structure.
- Repayment: cash flow and budget forecasts should reflect a realisticview of your business expectations during the period of thefacility.
- Protection: identify what can be offered as security, such asproperty, personal guarantee or a third-party guarantee.
- Advice: seek professional advice from your accountant and/or solicitorwhen constructing your business case.
The guide can be downloaded from www.businesslink.gov.uk
- Lynn Bryden is business and finance support officer at Sure StartStrategic Partnership Tyne & Wear (www.northtyneside.gov.uk)