A Creditor Payment Days ratio calculation will show you how long on average it takes to pay your creditors. If you have the right information to hand it’s easy to calculate it and in this video Rob Warlow from Business Loan Services takes you through the steps.

If you are applying for a business loan Banks will also use this ratio so calculating it before you engage with the bank can help address potential issues early on.

You can also learn how to calculate your Debtor Days ratio in this video: Debtor Days: How to Calculate Debtors Day Ratio.

A Debtor Day ratio calculation can help you better understand how long on average it takes to collect your outstanding debtors. In this video learn how to calculate this ratio and how you can use it to highlight shortcomings in your debtor collection processes.

This ratio is also used by banks when analysing your Financial Statements so calculating this ratio before you meet the bank can help you be better prepared prior to your meeting.

When you’re applying for a business loan how do you tackle the topic of past business failures with the bank?

Rob Warlow from Business Loan Services shares his thoughts on what you should say to the bank.

Getting a business loan will involve the bank reviewing your bank statements. But what is the bank looking for?

In this interview Rob Warlow from Business Loan Services explains what a bank can glean about your character just by looking through your bank statements.

During 2015 the Business Finance Bulletin has featured business and finance tips from various industry experts. In this compilation of interviews carried out in 2015 there are tips on growing your business, boosting profits, developing entrepreneurial staff, pitching for finance, using crowdfunding and managing VAT.

These collections of tips and ideas come from Dr Paul Thomas, Mike Ogilvie, Rebecca Jones, Steve Clarke, Steve Houghton-Burnett and Liz Maher and thanks to them for sharing their knowledge and expertise.

Get ready to take notes to kick start your business in 2016.

You can also listen to the podcast version by clicking below or downloading via our SoundCloud , itunes or Stitcher channel

What is Keyman Insurance cover?

If you are the key person within your business in that the business depends on you being there that is a risk which needs to be managed especially if you are borrowing money.

In this clip Rob Warlow explains how keyman insurance can help secure your bank finance.

In my latest Business Finance Bulletin Episode 101 I briefly reviewed a survey which revealed that businesses which keep up to date financial records are likely to grow twice as fast as those businesses with information more than nine months old.

This is such an important topic when it comes to raising finance that I thought I’d go into it in a little more depth.

The survey was carried out by KPMG Small Business Accounting and focused on how businesses can perform better when they have up to date financial information to hand.

KPMG found that small business’ management accounts are, on average, four months out of date, not a finding I can disagree with. However, more interestingly they found a direct link between having current financial information and likely growth rates.

They discovered that those with accurate information grew twice as fast as those with nine-month-old data over the last twelve months… 8% compared to 4%. A compelling reason if there was one to keep on top of your books!

This is a finding I can relate to. In arranging commercial finance for businesses, whether that’s for additional working capital or long term funding, one question the majority of lenders will ask is ‘can we see the latest management accounts’. Those who can deliver on the request have a far higher chance of getting finance than those who can’t.

On that basis, the survey’s findings that businesses with up to date figures are growing twice as fast is true – they are simply able to grab opportunities which their less organised competitors have to let slip through their fingers because they can’t get the finance arranged quick enough.

The researchers were also able to put a number on these lost opportunities. They estimate that with better financial visibility, small firms would have invested up to £1 billion more in the economy in the last financial year. Outdated financial information is resulting in lower levels of investment, employment, stunting productivity growth and holding back the economic recovery.

Many of the business owners I meet are the first to admit that they don’t like the financial aspect of their business and yet they struggle through trying to do the books themselves (usually in the wee small hours of the morning!), The survey found that small business owners spend more than two and a half hours on average each week trying to stay on top of their finances and probably doing a poor job or giving up!

The result of all this is that many business owners are making important investment and strategic decisions on the spot without a full understanding of their current financial position.

What’s the solution?

The answer is to pass the task of keeping your financial information up to date onto a bookkeeper or your Accountant; outsource it to the professionals. Concentrate on what you’re good at and get people in who love to crunch numbers.

The upshot of all this is the next time you are presented with an opportunity which needs finance then at least myself and other finance brokers will be able to move quicker and hopefully get you that all too elusive ‘yes’.

Here’s an interesting studio discussion on finance options for growing businesses. Running your own business can be hugely rewarding, but also hugely challenging with a multitude of issues to keep on top of and in this discussion there’s a look at the different types of finance available and tips on how to access them.

The panel includes representatives from Santander, Funding Circle and Enterprise Ventures.

There’s nothing more demoralising or agonisingly annoying than hearing the word ‘no’ from your bank.

What to do? Silently walk away shaking your head as you unceremoniously put your Business Plan in the nearest bin or do you decide to fight back because you feel your bank has misunderstood the opportunity?

If you’re a fighter, and you genuinely believe the bank has got the decision wrong, there is a way to get the bank to re-look at your request. Yet despite there being a formal appeal process many business owners don’t realise that such an avenue exists.

The Origins of the Loan Appeal Process

Back in 2010, during the depths of the credit crunch, the government spearheaded the formation of the Business Finance Taskforce. Made up of all the major banks the aim of the taskforce was to come up with actions to make access to finance easier.

One of the 17 actions was that each bank was required to establish a formal Loan Appeal Process whereby businesses which felt that the ‘no’ from their bank was unfair had a route to ask that their application be re-considered.

Who Can Appeal?

There are three key eligibility criteria which have to be met before a lending application appeal can be launched:

1. The company’s group turnover must be less than £25 million
2. The appeal must be made within 30 days of the decision being communicated
3. No previous appeal requests have been made in respect of the same application

The Appeal Process

If you have satisfied the eligibility criteria and you wish to appeal the decision you can request details on how to proceed directly from your bank, either via your Relationship Manager or by searching on the bank’s website.

Alternatively you can visit the Better Business Finance website and fill in the form with all your key details.

Once your appeal is lodge an independent team, which was not involved in making the original decision, will review your application. In carrying out the review of the original decision they may contact you for further information or clarification on certain points.

Typically the bank has to get back to you with an answer within 30 days of you lodging the appeal.

How Successful Has the Initiative Been?

In requesting each bank to establish its own Loan Appeal Process it was realised that the banks needed to be held to account to ensure the process was robustly implemented.

To fulfil this role Professor Russel Griggs an external, independent reviewer, was appointed to conduct regular on-site and off-site monitoring of each bank’s appeal process. Professor Griggs and his team report on a quarterly and annual basis and his findings have proved to be a useful insight into how banks are dealing with appeals.

Latest Loan Appeal Request Findings

The latest review covering the quarter from April to June 2015 revealed that there were 858 appeals of which 196 were successful. That equates to a 23% overturn rate and resulted in businesses successfully borrowing an additional £1.5m.

But how does the success rate compared to previous years?

In the latest report Griggs notes that in his first review for the year to March 2012 the overturn rate was 40% compared to 23% in the last quarter. On first glance it would appear that the banks are going backwards with fewer successful appeals. However, Griggs explains this apparent slippage by saying that the banks are now better at weeding out marginal applications early on by providing more proactive support. The outcome of this is that those applications which make it to appeal are more marginal and hence the overturn rate is declining.

So if you are at the receiving end of a rather blunt ‘no’ from your bank, and you feel that the decision is wrong, take control and start the loan appeal process.