Running out of rope

With the continued funding difficulties experienced by SME’s it will come as no surprise that trust in banks and other financial institutions is falling, according to a survey from the British Chambers of Commerce (BCC).

Half of the 1,560 businesses questioned said they mistrust banks and building societies, while 38% said they trust them less than a year ago.

The BCC survey said 57% of firms felt confident they could secure external finance, while 37% said they were not confident of doing so.

Despite the rhetoric from politicians it is difficult to foresee an environment where Banks and other financial institutions will be more receptive to requests for increased funding/credit lines.

It is the spectre of risk management or more pertinently the lack of management which overhangs the market.

Any approach for funding must be accompanied by a clearly defined strategic plan to take the company forward. At the same time those seeking to access increased lines of credit must demonstrate that they are strictly managing cash flow and have robust risk control procedures already in place.