roundtable 53


Together with the sponsors of our SME 100* – Haines Watts, Clifton Ingram, and Santander – The Business Magazine invited SME 100 company representatives to discuss the current performance of SMEs – ‘the engine- room of UK plc’. Is the engine-room driving our economic recovery yet? Is it firing on all cylinders? Is it being ‘throttled’ by lack of bank funding as Vince Cable suggests or . . .


Are we ready to put our foot on the throttle? Participants


internal restructuring meant that background knowledge on funding proposals was often poor. “All they see initially is a balance sheet and, and if the numbers don’t stack up to their now stringent way of working, it is an automatic ‘No!’ with no rationale behind it.”


Lined up to debate: our Roundtable team


John Burbedge reports the roundtable highlights Have we enough fuel in the tank?


David Murray highlighted a recent British Chambers of Commerce survey that concluded the pace of UK economic activity was running too slow to generate a sustainable economic recovery. So, are SMEs lacking the fuel of funding, or simply waiting for the lights to change?


Ian Nash, Santander’s Thames Valley director, said: “We regard ourselves as at the forefront in helping to get some traction for SMEs (up to £50m turnover) and have increased our SME lending by more than 20% per year for the past three years. While we are proactive in contacting prospective clients and have some great innovative products for SMEs, such as our new Breakthrough growth capital programme and the Open to Export initiative, our main challenge is getting buy-in from SMEs. They need to be less afraid of taking that first step in contacting a bank to talk about their funding options, and perhaps be more willing to try something different and explore new markets.”


Murray pointed out that a SPONSORS


Federation of Small Businesses survey showed that more than 40% of SMEs reported having funding applications turned down by high- street banks in Q2.


Nash agreed that the post- recession banking landscape on lending was very different. “Santander has always been prudent, but all banks these days ask SMEs more questions and have to have satisfactory covenants in place. It’s to ensure we are lending the right money to the right businesses. That’s not just for us, but also to protect the client’s business growth too going forward. In addition, the regulatory environment regarding bank lending is a lot tougher than a few years ago, putting extra restrictions on both banks and businesses.”


Adrian Williams: “A sensible business with a sensible model will generally get funding. However, today there is a lack of local decision-making within the banks. You need an advocate in your local bank to fight your corner. While the funding is still there, the decision- making is now one step removed.”


Alan Pemberton said the banks’


Bill Annan thought this downturn had brought mixed fortunes – “some SMEs have never had it so good, some never so bad” – but agreed with Murray that lack of funding was holding back activity. “A lot of the lending today is highly secured, at times you think totally over-secured, but nevertheless the banks are trying to lend. On the other hand, there are times when you wonder why the bank is putting pressure on the customer, why won’t they just help?”


Richard Blanford: “Banks need to be loan partners; at the moment they are just funders. The strictures banks try to put on us – a 20-year- old profitable business with a good track record – are unbelievable.”


Bill Annan: Chairman, solicitors Clifton Ingram LLP


Adrian Williams: Partner, business accountants and advisers Haines Watts


Richard Blanford: MD, Fordway Solutions, IT infrastucture integrator


Jocelyn Lomer: CEO, Cereno, virtual meetings specialist, Reading


Susan Elliott: Director, VitalSix, SME business coaching and consultancy


Christopher Lacey: CEO, William Lacey Group, residential construction, Woking


Allister Moorcroft: MD, Docherty Chimney Group, manufacturer, Newbury


Ian Nash: Business development director, Santander corporate banking


Alan Pemberton: Managing partner, Tuffin Ferraby Taylor, independent building consultants


Karim Sekkat: Owner and MD, KAS Technologies, hi-tech manufacturer, Oxford


Philip Waite: Group director, Aitchison Raffety, property consultants


Bill Annan


Karim Sekkat noted the restraints on banks too. “The Government needs to be a referee not a player. Banks need to be allowed to go down when they make mistakes and to go up when they have a good business strategy. We need to be Darwinian and let the strong survive, and the weak die.


“Banks want to lend to people who are secure, which is only fair. With respect to my SME colleagues, if


David Murray: Managing editor and publisher of The Business Magazine, chaired the discussion


you can’t find funding with banks or equity partners, you have to ask yourself if you are prepared to give them enough collateral, or make them partners in your business.”


Continued overleaf ...


THE BUSINESS MAGAZINE – THAMES VALLEY – SEPTEMBER 2012


www.businessmag.co.uk


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