How the banks are lending
As the economy continues its gradual progress to full recovery and the financial outlook of the country is steadily improving, we are finally experiencing a little more liquidity in bank finance at all ends of the spectrum.
Whilst bankers on the frontline have been preaching the banks’ mantra that they are ‘open for business’ for quite some time now, it has taken until comparatively recently for consumers (and us as advisors) to see this convert into lending.
The EFG which has been around now for over 5 years has not always been as accessible as perhaps the government had planned due to the security purportedly covered by the scheme in reality becoming a backstop rather than an alternative to a proprietor’s bricks and mortar.
However in the past month alone we have had numerous small successes (ranging from £50k to £1m) in raising bank funding for various purposes including working capital, acquisition funding and growth capital. The pleasing thing for us as professional advisors is that these facilities have been signed off as a mix of unsecured overdrafts, unsupported cash flow lends and of course through the EFG scheme. Add this to some of the larger projects that we are working on which appear to have gained banking support, then the outlook for the corporate funding market would appear to be bright.
We understand from the market place that even the banks that have struggled so publicly are putting their energies into recruiting experienced business development mangers in order to get money out of the door.
Whilst nobody wants to see a return to the conceivably reckless days leading into the last recession, these green shoots are a welcome development in a market that has over recent years become a struggle.
It is still perhaps too early to suggest that bank funding is as readily available as the banks might have us believe. However, with a good advisor on board, a well prepared plan and a set of achievable forecasts, funding would now appear to be available for the right businesses.