Professional Documents
Culture Documents
Rob Oades
Partner, London Office
With the level of criticism directed at the banks for their treatment of Small Medium
Enterprises (SMEs) and, in particular, the consensus that they are not doing enough
to provide the critical funding for both essential working capital and investment
projects, a key question is where does the blame actually lay and should it always be
directed at the banks? In particular, do SMEs do all that they can during the bank
decision making process to help themselves?
So do we assume, therefore, that the blame clearly rests within the banking sector
and their decision making processes? Consider this however;
2. 44% of businesses with between 10 and 50 employees did not have a formal
Business Plan
3. Just 19% of SMEs sought external advice before applying for loans and 43%
did not think that they needed advice
The starting point must always be to have an understanding of the bank credit and
decision making process and to present the proposal in a format that makes the
decision process as easy as possible. There is a need to be always very mindful that
the banker that you present your proposal to will invariably not be the decision maker
and that he/she will need to prepare a detailed report to a central credit department in
order to gain agreement. A need to ensure, therefore, that your Business Plan is both
succinct but also detailed enough to cover all required information. If it does then the
process will be smooth, quicker and will convey the correct positive impression from
the outset.
Be very mindful also that the way in which your proposals are presented to the bank
are just as important as the written content of any Business Plan produced. Ensure
Let me now deal with the content of any Business Plan around which your request for
bank funding will be based. The content should include as a minimum:
2. A very clear indication of what the core business is - what are the
products/services provided and which industry sector does it operate within.
This should be stated in one or two clear sentences as a maximum. If your
business operates in a “niche” environment or has specific unique selling
points then state them clearly
3. C/V’s and business experience of the main people who will run and drive the
business. Ensure to stress any relevant experience that will help to ensure
success and explain who within the team will perform which responsibilities (if
appropriate)
4. What are you seeking to achieve through the business? Where do you want
the business to be in 5 and 10 years time and what strategy will you pursue
in order to achieve this?
5. Confirm the amount of facilities being sought and be specific about the
purpose. Remember that the bank will look to fund capital projects by way of
Loan and day to day Working Capital by way of Overdraft/Invoice Financing.
6. Operating analysis i.e. how does the business operate on a day to day basis
and, in particular,
- Main suppliers if appropriate
- Highlight main (or proposed) customers
- Confirm agreed terms of trade both on supply and demand
side
- Main competitors
Conclusion
Armed with a Business Plan covering all of the above issues, your chances of
success will be much enhanced. Remember, however, that you will undoubtedly be
challenged and questioned on the content and a very clear need, therefore, to ensure
that you fully understand and endorse it in totality. Too many issues arise because
Business Plans are either produced for business owners without sufficient input by
the owners themselves who then display a lack of detailed understanding under
By making the decision making process easier for the banks the chances of positive
outcomes will be significantly enhanced!
Rob Oades is a banking specialist with many years experience of working within the
sector. To seek advice regarding your business banking needs, or to comment on the
above article, please respond to roboades@etospartners.com
This document is not an offer or contract. Neither Etos Partners nor you have any
obligations or liability to the other unless our authorized representatives enter into
definitive written agreement. Terms included in this document are not binding unless
they are included in such a written agreement.
The information in this document shall not be disclosed outside your organization and
shall not be duplicated, used or disclosed in whole or in part for any purposes other
than the discussion of the topic of the presentation