Small firms urged to form credit plans
Mon, 13 Jul 2009
Small businesses seeking a loan should state clearly why they need credit and how they are going to pay it back, it has been claimed.
According to Business Link, many companies are looking at alternative sources of finance at the moment and should always present a clear reason for borrowing and a clear plan for repayment to potential lenders.
John Grange, Business Link adviser, said: "My advice to any business looking for credit is to make sure you know what you want it for and to assess whether you really need it. Can you find that money within your business somewhere, like within existing stock or by managing your debtors and creditors better?"
He added that businesses have always accessed finance from a variety of places, including from friends and family, as well as through credit cards, loans and overdrafts.
Mr Grange added: "If you are going to approach somebody for a loan of any sort, make sure you are very clear about what you are using it for and how you can repay it."
Figures from the British Bankers' Association published in June show that lending to small businesses by the high street banks rose by £287 million in April 2009.
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