Firms must have "solid" business plan - commercial mortgages

25 March 2009

Small firm owners must ensure they have a "solid" business proposal in place before approaching banks for finance, such as commercial mortgages, it has been suggested.

George Derbyshire, the chief executive of the National Federation of Enterprise Agencies, urged companies to prepare in advance before seeking support from lenders.

"It's no good turning up at a bank with an ill-conceived plan," he advised, adding that owners should create a thorough financial forecast.

"If the numbers add up and the proposition makes sense, then I believe support will be available," he remarked.

Mr Derbyshire's comments came after figures from the British Bankers' Association showed that in January, lending to small firms increased by £235 million to £54.2 billion.

The body stated that banks are working to assist companies through the economic downturn using initiatives such as its Statement of Principles, which outlines commitments to the sector.