August 14, 2010
Filed under: Business Finance — Alan @ 5:27 am
The Banking Sector responded to criticism over how it treats small businesses in need of lending by saying that many of those who work out of serviced office space can now make use of the ‘lending taskforce’ which includes all of the six major banks in the UK such as the RBS, Barclays, and Lloyds.
Vince Cable placed pressure on banks to start lending to small businesses or face a series of consequences. It is perceived that better lending to small businesses will create new jobs which in turn will help boost the economic recovery.
The BBA (British Banker’s Association) announced in response that they have created a series of proposals that will help to stimulate the private sector with the top figures from UK banks working on groups that will troubleshoot the problem of banking lending.
Chairman of HSBC, Stephen Green, stated in a letter written to Chancellor George Osborne that the banking sector is aware of the need to provide finance to viable businesses in order to support the UK economy and that the taskforce will help explore the issues that surround lending so that finance can be given out better.
The announcement is apparently the Banking Sector’s response to the criticism they have been facing over restricting finance to SMEs.
July 31, 2010
Filed under: Business Finance — Alan @ 9:07 pm
Banks may face a new tax on any profits if they do not start to lend more to SMEs and other companies in need of credit as well as start limiting their bonuses according to the Business Secretary.
Vince Cable stated that if back payouts to shareholders and staff were trimmed then approximately £50bn could be generated towards new business lending.
At a news conference he stated that dividend payments are too large along with bonuses and the Government needs to look into placing a tax on profits in order to properly choose a way to re-invest into businesses. He also said that they hope the Government will not have to use sanctions to force lending, but it will remain an option.
Cable’s warning complimented the publishing of a new consultation paper from the Business Department and Treasury that looked at ways to increase business’ access to cash flow.
More government loan guarantees, stock exchanges on a regional level, and other methods to boost liquidity in the banking system were also suggested as a way to promote more financing among banks.
The Business Secretary stated that at the moment complaints from businesses that they cannot get proper access to finance is simply falling on deaf ears as banks continue to maintain that they are lending at an 80% level.
He added that the problem is especially large for SMEs that cannot find the proper finance impairing their ability to create jobs.
July 30, 2010
Filed under: Business Finance — Alan @ 4:18 am
Entrepreneurs may watch their dreams of retirement shatter after Government the proposed new cap pension contributions for the year that they plan to retire. The new proposals are tied into changes that will let top earners still receive 50% tax relief on all of their contributions.
However, if the proposal does continue the contribution amounts will be capped every year at £30,000 to £45,000 which is a large drop from the previous cap of £255,000. Plans to balance tax relief for those who have high earnings would be tossed aside as a result.
In order for the tax relief to be put into effect though, pension contributions in turn will become restricted. The concession was designed with the idea of aiding small business owners and entrepreneurs who oftentimes find that their wealth and retirement gets tied into their business.
Campaigners for small business have accused the Government of forcing small entrepreneurs to take the fall in order to protect the pensions of millionaires.
Spokesman for the FSB, Stephen Alambritis, stated that the new regulations would hurt the four million self-employed people that reside in the UK. This is due to the fact that self-employed people tend to place their money directly into their businesses instead of making large pension contributions.
Alambritis continued to say that in turn they start to make large contributions as they get closer to retirement in order to make up for their short contributions earlier as they try to cement their business into the marketplace.
July 22, 2010
Filed under: Business Advice, Business Finance — admin @ 8:52 am
As you will have seen from the various advertisements that grace our television screens each and every day, it is easier now than ever before to access no-win-no-fee legal services. This has contributed to the claims culture that is starting to gather pace in the UK and as a result it is important that as a small business owner, you protect your company against this by taking out public liability insurance.
There are many things you need to take care of when you first start up your own business and it’s important that getting the correct insurance is right at the top of the list. Whether you’re starting an IT consultancy business or are going into the estate agency profession, you will need to ensure that you plan ahead against every eventuality and get yourself a comprehensive insurance policy.
Even if you are one of the 20 per cent of small businesses in the UK that don’t work from an office space, a trend that has come about as companies try and reduce their overheads in these tough economic times, you will still need to invest in business insurance.
When you first start out in business you may find that you are the sole worker for the company, but as you as you start to employ staff you must make getting employers’ liability insurance your number one priority. If you have employees, whether they are full-time, contracted or voluntary workers, it’s a legal obligation that you provide cover against a claim from a member of your staff.
So if you run an energy assessment business and one of your employees are injured while carrying out work for your business, your employer liability will be triggered. If you don’t have the correct insurance this could turn out to be a major problem, but with the right cover the legal and compensation costs will be paid under the terms of the policy and you can carry on going about your business.
It is not only claims from your own employees that you need protection against, but also those from members of the public. As an energy assessor will be required to visit people’s homes as part of your work, and if an accident were to happen and you damaged their property, then a claim could be brought against you.
You also need to get protection for the work that you are carrying out, which professional indemnity insurance will take care of. Despite your best intentions, a client that you have performed work for may be unhappy with the quality of it and as a result you could be required to correct the mistake.
As a small business you are particularly vulnerable to claims of negligence, something that could well affect you if you run a consultancy business where you regularly give advice to clients.
It doesn’t take long to take care of your business insurance needs but it will definitely be time well spent. In the current business climate it’s not worth taking any unnecessary risks and by taking out business insurance you can be safe in the knowledge that you’re protected.
July 16, 2010
Filed under: Business Finance — admin @ 5:11 pm
There are already a number of challenges you’re likely to face if you’re an entrepreneur looking to get a business idea off the ground. But at Lloyds TSB, we believe our free business banking options could be just what you need to help make this process easier.
By making sure you have a reliable business bank account in place from the outset, you’ll have provided a financial backbone for your project – and in addition to the basic features you’ll need to keep track of all of your transactions, you might also discover our range carries a host of unexpected benefits.
One of the great things about setting up a small business account with Lloyds TSB is that we make it as easy as possible, while at the same time remembering every individual is different. It may be you want to get the account started from the comfort of your home or office PC. If this is the case, the application can be done online. If, on the other hand, you would like to benefit from having one of our expert members of staff to hand you can do so in one of our many nationwide branches. This means you get to ask questions at any point. Of course, should you prefer to combine convenience with peace of mind, the option to apply over the phone is also there.
Whichever you choose, in all cases you’ll need to have certain pieces of information to hand. Initially, you’ll need to be able to confirm that you’re over the age of 18 and that you are using the account for business purposes. This will also require that you can confirm you’re a sole trader, partner, or director of the company. Having available the personal contact details of all those who will require access to the account will also be necessary, which includes any associated partners or directors.
If you are already a Lloyds TSB customer and are looking at business accounts, you’ll find getting started is even easier – as we will have much of your information on record. However, if you aren’t already with us, some proof of identity and evidence of your current address will usually be enough to get things moving for you.
If you are successful in setting up the account, you’ll have an initial 18-months period where your day-to-day banking will not be charged. This means no fees for paying in or taking out cash, paying in or issuing cheques, paying standing orders and direct debits as long as the account is in credit. All we ask is that you operate your account within agreed limits, for example not going overdrawn without prior agreement. We also have a number of special offers from Sage, one of the UK’s leading suppliers of business management software.
Lloyds TSB Bank plc Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 020 7626 1500. Lloyds TSB Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237. Telephone: 0131 225 4555. Authorised and regulated by the Financial Services Authority under numbers 119278 and 191240 respectively. . Licensed under the Consumer Credit Act 1974 under registration numbers 0004685 and 0198797 respectively. We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk.
May 23, 2010
Filed under: Business Finance, Loans, Small business — admin @ 4:51 pm
There are a number of instances where small business loans can be called upon to revitalise a company, as well as address some of the impending issues it may be facing. For many people, the most costly part when starting out can be at initial set up, but they can also find that once they are up and running it becomes necessary to obtain a little more collateral in order to compete with their fellow entrepreneurs.
One area in particular which can benefit from such a financial boost to push you ahead of your peers is market presence. This means cash might be needed to spend in a number of areas – including advertising, marketing and improvements to any online facilities you may have in place. If your firm is already enjoying a period of growth, expenses can also come from elsewhere, such as new staff and bigger premises. In most cases these don’t come cheap – but they may be absolutely essential if you want your small business dreams to come true and your projects to continue to flourish.
For some start ups, technology plays a big part in day-to-day affairs and may even be a key element in the products and services you provide to your customers. This can mean it is vital to have access to the best hardware, software, data storage, telecommunications or manufacturing facilities. After all, if you fail to furnish your company with the most up-to-date systems, what’s to stop one of your competitors jumping ahead of you and doing just that?
So what options are available for Lloyds TSB business account customers looking to kick start, boost or expand their brand? Well, one option that could provide a short-term, flexible solution is an overdraft, which can be handy when unexpected overheads arise. For a more long-term investment, a loan could be more appropriate for you needs – and with variable and fixed-rate options available to applicants the terms can be tailored even further.
Once a small business has started to make its mark on the community, thoughts may also turn to making sure a dedicated headquarters is available to your growing staff – at which point it may be prudent to look at a commercial mortgage. That is, of course, if refurbishing and building upon your existing premises is not a realistic possibility.
Those who do decide to opt for a Lloyds TSB business loan will find there are a number of tempting features to the range of packages that could be just what they have been looking for. If the purpose of the cash is to fund a long-term strategy, the fact you could repay over a term of up to 30 years might be of interest, while being able to borrow anything from as little as £1,000 means smaller, quick-fix investments are also a possibility.
Optional loan protection is also available to help out in the event of sickness, accident or death and the bank offers you the opportunity to make your application on the telephone or in your local branch – look at our website for more details.
Any property given as security which may include your home, may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it. All loans are subject to status and we will need your permission to carry out a credit check on you and your business. You should not apply for an amount that you cannot comfortably afford to repay.
Lloyds TSB Bank plc Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065.
Lloyds TSB Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237.
Authorised and regulated by the Financial Services Authority under numbers 119278 and 191240 respectively.
Licensed under the Consumer Credit Act 1974 under registration numbers 0004685 and 0198797 respectively.
We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk
April 16, 2010
Filed under: Business Advice, Business Finance, Small business — admin @ 9:05 am
Research by NatWest and its Royal Bank of Scotland (RBS) parent, has highlighted that 71% of UK small and medium sized enterprises (SMEs) have suffered from late payments in the past 12 months. The research found that in the past 12 months, a staggering £63bn remained unpaid beyond the agreed deadline and that £15.7bn of this was more than 120 days overdue, potentially threatening the survival of SMEs.
Document management and imaging software company, Version One (www.versionone.co.uk), has published some advice how SMES can cut through late payment excuses in order to get paid on time.
1. Don’t underestimate the importance of credit checks.
It’s vital to assess a customer’s creditworthiness before supplying them with goods and services. Don’t be afraid to turn away business if your potential supplier has a poor credit history as a handful of poor payers can bankrupt a small company. There are licensed credit reference agencies available as well as online credit check companies. The latter are suitable for even the smallest of companies.
2. Ensure credit limits are authorised and enforced by the relevant people.
It’s also advisable to enable the electronic authorisation of credit limits by all relevant people internally, such as the managing director, finance director and credit controller. This speeds-up the credit limit authorisation process, keeps all the key people in the loop and provides an authorisation trail for future reference.
3. Always be clear about your terms and conditions for payment.
Print these terms on the invoice to avoid any potential ambiguity.
4. Request a purchase order number/reference and ensure this is visible on the sales invoice.
It’s also important to reference the person who authorised the purchase to avoid queries further down the line.
5. Electronically deliver sales invoices and statements.
Electronic rather than postal delivery ensures customers are in receipt of invoices sooner. There is also a record of when the invoice was received (and read) by the customer so that you can say “you received it at 9.15am on the last day of the month and opened it at 9.20am”. This bypasses any problems with the postal office and prevents customers from using the excuse that they haven’t received the invoice in order to delay payment. Electronic delivery also frees-up staff time spent printing, photocopying and enveloping invoices and statements so that they can focus on chasing late payers.
6. Always provide electronic copies of signed proof of deliveries (PODs) with the sales invoices.
This will eliminate the all too common excuse; “but we never received the goods”.
7. Store all sales invoices, statements, PODs and related documents in a secure, electronic archive.
These documents also need to be instantly accessible from the desktop and linked to the relevant ledgers in the accounting system so that they can be retrieved quickly and no key documents can ever get lost.
8. Provide early payment discounts and late payment charges to incentivise customers to pay on time.
Remember that the Late Payment of Commercial Debts (Interest) Act 1998 allows small businesses with less than 50 employees to claim interest on overdue payments from other companies.
9. Introduce flexible payment options.
Consider introducing more flexible ways for customers to pay such as in pre-agreed instalments.
10. Keep in regular contact with debtors.
This will help to identify any potential payment issues early on.
In the current climate , it’s crucial that companies take action to claw back monies owed if they are to avoid insolvency due to late payments like 4,000 firms in 2008 (according to the Federation of Small Businesses). A few simple changes to the credit control process can make a huge impact, ensuring SMEs are around to prosper when the economy fully recovers.
March 26, 2010
Filed under: Business Finance — Alan @ 2:30 am
The chancellor announced a new set of measures that will aid grassroots economy in the recovery effort that includes additional lending for SMEs that totals up to around £45 billion.
The funding will come from the state controlled banks Royal Bank of Scotland and Lloyds under the terms of setting a capital growth fund so that firms that are growing fast may eventually increase their worth up to around £500m.
Alistair Darling stated that the measures are central to the new budget plans and ultimately they would help the government better back the finances of the nation. Darling said that the country cannot afford to take growth for granted and need to start acting as a launch-pad to help businesses grow and succeed.
Darling pledged that it would award more contracts to SMEs by 15%, reduce business rates so that 345,000 SMEs will not have to pay, double the threshold for entrepreneur relief up to £2m, and make the annual investment allowance £100,000 which is double its previous rate.
Additionally, the government will support SMEs by creating an appeals process that SMEs can turn to if they feel they have been rejected for credit unfairly.
Small firms for the most part applauded the new announcement and proposals but there was some disapproval shown at the fact that the government will still move forward with the plan to increase the amount that firms need to contribute in towards national insurance. According to the Federation of Small Business, the increase in national insurance could cause redundancies that total around 57,000.
March 19, 2010
Filed under: Business Finance — Alan @ 6:30 am
UK SMEs have developed a new spirit fighting to navigate through their upcoming prospects in 2010, as well as the overall state of the economy. However, some may fall into the lower tier of the SME economy in terms of customer service according to research released from Cisco.
The 2010 Cisco Customer Kings report looked at how small firms deal with their customers and found that out of the 1,000 businesses surveyed, 61% reported that they are optimistic about the coming year with another 77% expecting the economy to take an upswing this year.
However, even though the UK SME landscape has developed a DIY attitude, many are in danger of becoming split between modernized firms and customer centric firms that will go up against those that are not willing or ready to be flexible to the needs of their customers.
Overall, 57% reported that they had begun to focus in on their customer service in order to make it through the recession, but a stunning 43% stated that they had not looked into better customer service which means that they may soon start to reap the repercussions.
The large gap between businesses that are not consumer centric and those that are becomes more dangerous due to the fact that now customers are willing to look for new suppliers compared to last year.
Five other attributes of successful SME businesses were also outlined in the report as being customer focus, e-commerce, business model, social media usage, and technology.
Filed under: Business Finance — Alan @ 6:25 am
During a meeting held in Emirates place in Abu Dhabi, UAE Minister of Economy, HE Sultan Bin Saeed Al Mansouri, and British Minister of State for Trade, Investment, and Small Business Lord Davis developed an effective mechanism to help increase cooperation between SMEs and a system to exchange data and experiences between the Emirates and Britain.
The move comes as a result of the UAE-UK Joint Economic Committee that met in London last October.
Mansouri stated that the new mechanism will help enhanse the way that SMEs perform in the UAE and the Ministry of Economy plans to use the SMEs in order to help support and hold up the national economy.
Throughout the meeting both parties took a look at how bilateral trade can be increased up to 12b pounds by the year 2012 and identified which sectors can be improved. The main sectors that will be needed to reach the target include industry, renewable energy, SMEs, innovation, and finance.
In addition, Mansouri said that both countries hold many opportunities and that the meeting was very productive and a great way to discuss the best way to address challenges so that the two countries can start to invest in each other.
Lord Davis also agreed that the meeting was productive and was a valuable way to build business relationships between the UK and the Emirates if both groups agree to work towards their goals under the established timeframe.
This was the second meeting that was held between the new joint economic committee of the UAE-UK.
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