In Focus Risk
second was the perennial lesson in business ‘do not put all your eggs in one basket that appears and is easy to access!’ George Bernard Shaw stated (amongst
other things): “The sign of maturity is being able to live with uncertainty,” and President Franklin D. Roosevelt said at a time of depression and real long-term hunger in the USA: “We have nothing to fear, but fear itself.”
A better tomorrow So why are businesses large and small not borrowing to develop their firms pioneering in new markets in the UK and the rest of the world? So why do lenders large and small, including credit unions, not lend to micro, small and medium enterprises operated by their proprietors? Is it that these lenders use stereotypical
‘tick box’ templates to make decisions? Is that the underwriters at all levels lack
life and underwriting skills and, without the baby’s dummy of a template, cannot make
September 2017
So why do lenders large and small, including credit unions, not lend to micro, small and medium enterprises operated by their proprietors?
Often, embryonic entrepreneurs have put
their socks and stockings into their businesses, there is no monetary fat or collateral left. If there is any, that is an amber light to a loan being made. Many of the great UK businesses – all
once start ups – developed in this way, such as EMI (in its heyday), M&S, Tescos, Forte, Foyles, and Shell Oil.
decisions? Is it that underwriters do not know how to read a business plan, assist the skilled entrepreneurs lacking literary and accounting skills to make a business case for a loan? Credit unions can and do this but, sadly,
many do not, preferring to remain or develop as ‘looky likey’ banks.
www.CCRMagazine.co.uk
A profitable future for lenders and borrowers So why do lenders not start to concentrate more on the wealth makers and employment creators, who are better risks as their owners’ livelihoods depend on it, starting with the ‘walking the dog’ experimental ‘toe in the water’ small type of loans creating long- term appreciating relationships, rather than concentrating on granting consumer debt, a depreciating asset often driven by satisfying instant gratification and a short or transitory relationship? Well? After all, we should give credit where credit is due! CCR
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