Byline pic of new EDP business columnist Kate Wilde of Engage with Business.; Photo: Simon Finlay; Copy:; For: EDP News; EDP pics © 2009; (01603) 772434

During the recession of the early eighties many banks lent money unwisely and were held to account, all of which seems to have been forgotten in the years leading up to the financial melt down of 2008.

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So how do new businesses find the funding they need?

To begin with we need to distinguish between those starting their first business with no previous relevant experience and those who have experienced, and have learnt the lessons of business and the risks involved.

There is another group with entirely different needs, hi-technology companies that need to think big and move quickly, they often have little business experience and are a high risk investment and generally seek business angels or venture capital.

But I want to focus on those who are new to businesses who often prefer to get started by self financing, bootstrap funding. As they earn they plough money back into the business, growing slowly, playing safe.

Now this may not seem to be the answer we need to support economic recovery and create jobs but these small businesses really do make a difference.

They are self sufficient and as the business grows and they become profitable they pay taxes.

In preference to employing staff they often sub-contract other local self employed people, who then pay taxes.

A quick analysis of the accounts of any small business will show how much money has been ploughed straight back into the local economy.

If these businesses survive the first couple of years and successfully grow, the time comes when they need to plan the way forward. By this time they will have gained business skills, experience, and confidence, they have become ‘business people.’

Growing a business requires investment. Taking on premises, employees, and new equipment all need to be funded and the time will come to present your case to a case to the Bank Manager.

A business plan will be required, and although your first instinct may be to get your accountant onto this, there is value in you working through it yourself. It will focus your mind highlight areas which need a little more thought and give you confidence as you move forward.

Many people find the idea of writing a business plan quite daunting.

The starting point is to think about what you would want to know if you were the bank manager. You would want to see evidence from previous accounts that the business is viable, evidence that new or expanding markets exist, and a well thought through marketing plan. Most importantly you would want to know that the right people are in place to make it happen.

When this is in place and your bank still says no, then is the time to whinge about banks not lending but until then let’s give them a fair chance to act as responsible lenders.

Kate Wilde, is managing director of Engage with Business Ltd.