Time to Look Forward?

08 October 2009

There’s a lot of talk in the business media about the shape of the recession, and whether we’re actually over the worst. Last January, Baroness Vadera, business minister and an ally of Gordon Brown, saw the first green shoots of recovery and was universally ridiculed. I’ve always thought that looking on the bright side is usually a good thing, but communicating your ill judged hopes to a nation gripped by the most ferocious economic downturn in 80 years, makes you look rather like Julie Andrews haphazardly skipping across a meadow in the direction of a German Panzer tank.

Nine months later and the Baroness is no longer alone. We can’t quite smell the edelweiss but, and say it quietly, deals are being done. So is the recession going to be an ‘L’ or a ‘W’. Don’t listen to anyone who says it’s going to be a ‘V’. I subscribe to the ‘bath - shaped’ idea.

There’s undoubtedly more pain to come, but we need to start thinking about the future more positively. Cash management has been the mantra for the last year and a quarter now and it still holds true. But businesses that are tempted to protect their balance sheets to the exclusion of all else are in danger of missing an opportunity.

If you see a chance to grow or develop new business what’s stopping you? Probably a bit of a silly question when cash seems as scarce as ever. But things are starting to move. It’s easy to blame the banks for all our ills but they aren’t entirely at fault for the sluggish progress of the government’s loan initiatives.

The Enterprise Finance Guarantee with £1.3bn earmarked was announced last November. The scheme provides loans of up to £1m, 75% of which is underwritten by the state. But the banks didn’t like them at first. Probably because the rule book didn’t come out until early spring!

Similarly, the Capital for Enterprise Fund, which gives loans of 50k upwards, was trumpeted eighteen months ago, and I believe the rule book has now finally arrived.

The ethical banks have weathered the storm, largely thanks to their prudent pre-recession approach. So there are places to go for a business with a robust strategy and a well presented business plan.

But as with all approaches to lenders, in whatever climate, an idea on the back of a fag packet will not hold any water. If you’re going to take the time to meet with a bank, take the time to prepare.

And for goodness sake, don’t pretend the recession is already over.  


Stuart Wilkin writes for Insider www.insidermedia.com

Posted  08 October 2009


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