Informed Funding welcomed four representatives from banks who answered questions about SMEs applying for finance.

Roger Fenwick, NatWest's Regional Director (), Andy Veares, Metro Bank's Head of Corporate Banking, Jo Farman, Barclays' South East Business Manager and Neil Higgs, Handelsbanken's Branch Manager, answered questions from our own Programme Director Andy Davis, as well as questions from our audience, and gave a very insightful overview about how their banks deal with SME business loans.

Andy began by introducing the current state of the industry and how it has developed since the financial crisis of 2008, showing how challenger banks, including Metro Bank and Handelsbanken who were represented by Andy Veares and Neil Higgs on the panel respectively, have been growing, offering an alternative to the larger banks in the UK.

Handelsbanken, for example, deals with many small and growing businesses and have been serving UK businesses since 2002 and has nearly 200 branches in communities across the country, with the UK being its fastest growing market. The growth in these challenger banks has seen a trend towards more ‘face-to-face’ banking, where the bank’s business managers personally discuss loans with the business owners who are applying for them. This trend has lead to the larger banks, including Natwest and Barclays, represented on our panel by Roger Fenwick and Jo Farman respectively, to do the same.

Our panellists discussed what they like to see from businesses applying for finance, covering business plans, but also emphasising the importance of the individual.

All our panellists agreed that a business plan should not be too long, covering the necessities, including evidence and figures to support the claim that the business will be a success.

However, they also agreed that it is just as important to look at the individual or individuals who are managing the business, especially as they are the people who should be putting the business plan together. By showing an understanding of your business, as well as the competitors and the market, the bank’s decision makers will feel more confident in your ability to run your business.

Depending on the bank’s confidence in your plan, they may ask for a personal guarantee. Not all panellists said it was a requirement, but by being able to offer a personal guarantee to the bank also shows confidence in your own business.

All our panellists also agreed that they like to build relationships with their clients. The more the bank knows the client, the more confident they will be to accept a finance request. This makes it harder for first time customers, but it will get easier over time providing a good track record is developed.

At the end, the panel discussion was opened up to a Q&A session, where guests asked the panel a variety of questions about what to expect when applying for finance from a bank. The attendees fed back to say that the session, and especially the Q&A session, was very helpful to them.

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Alternative sources of finance are also growing very fast, but awareness of these sources of finance is still low. Despite the large number of ‘products’ available, there is a lack of knowledge, and therefore an awareness gap among growing businesses about the finance options available other than bank loans. Our aim at Informed Funding is to un-complicate and increase awareness about these options. See our new homepage if you are interested in finding an alternative source of finance, and follow our 5 easy steps: informedfunding.com

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