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SMEs - Access to Finance and Support

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07 November 2009

SMEs - Access to Finance and Support

I was invited by Business Insider magazine to take part in a round table discussion last week sponsored by Santander in Birmingham. The subject for this particular session was about "securing business finance". In particular we looked at how easy is to access finance now as opposed to 6 months ago. Round the table we had representatives from the banking sector, an accountancy firm, lawyer, Transitions Bridge Fund Loan scheme,  FSB,  Aston Reinvestment Trust and a family run business - and myself as a previous chief exec and now business advisor. It was apparent that the professionals in the room firmly believed that there was improved access and choice for SME's. This may be the case but I pointed out that no one has actually shared this with owner managed businesses. SME's and their executives remain focused on survival and so don't have time to investigate options until it's too late. "What barriers exist for SME's" - well there's a leading question! Time, skills, experience, money, invoice discounting and banking terms, credit insurers, employment law,  cash flow, H & S, failure within the provision of management information, no succession planning, unstainable growth, lack of sales and marketing, no business plans ...and on we go... take your pick! More than anything it's a lack of trust and support. One of the gentlemen at the table mentioned Advantage West Midlands, our RDA and Business Link - and the Chamber of Commerce. I suggested that SME's do not have the time, patience or inclination to approach any of these. I was told that they all have websites to tell us what is available - well 've tried using them and gave up! Frankly the support available to succeeding and struggling SME's is beyond terrible. Another chap mentioned how accountants could provide support - well who would trust them? I agree they should be a part of the team as should your bank but there is no trust and we all know they have other agendas. We need better advisors and critical friends to support and challenge, to ask the "obvious" questions, to provide contact details for trusted and suitable professionals, to help gain access to funding, to prepare for sale and exits and to support projects. May be this is best delievered as a non executive role? or I would always (and from a good number of years experience as the CEO of an SME) recommend a quarterly health check preferrably as an away day and delivered by a trusted business advisor (that knows what it's really like and can actually help). This should look at the individual executives, the board as a whole and senior managers, communication, the business plans (and I would be looking for the realistic, hopeful and negative versions!), strategy and how things are being delivered, management financials and then any details. Finally agreeing on what the action points are and responsibilities. I can't recommend this enough - we all need support and somewhere to turn both in good times and bad - and certainly have a trusted advisor that is external to see the obvious and help guide you.  You shouldn't be afraid of due diligence - this should reinforce everything and if you want to seek funding, you could then demonstrate a solid management style that is proactive and able prepare in advance.  Everyone around the table agreed that this would be fantastic in applying for funding and proving you're a  'great business'. There is a £1000 of funding available for businesses to help with this support - if you might be interested please drop me a line by email or by calling 0781 99 27 26. To read more about this round table discussion, please get the December copy of Business Insider.