Your Money-Lending Solution When the Banks Won't Budge; with Financing Options from Banks in Short Supply, Don't Assume That Their Negative Response to a Funding Request Is the End of the Line. Many Other Options May Be Much More Suited to Your Needs. RICHARD TAIT of Local Firm Inspire Financial Management Explains

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about wansbeck IT IS not so long ago that a business owner, when faced with the prospect of having to pay month-end salaries and a VAT payment, could call up his or her bank manager and ask for a bit of flexibility with the overdraft.

These requests were often granted.

The events of the last three years have changed all of that - perhaps forever - resulting in a very different financial environment for SME businesses.

Stricter lending criteria, together with depleted balance sheets and reduced personal assets, have created a very difficult environment for banks to lend money to needy businesses - even on a short-term basis.

Lenders have become increasingly keen to ensure that the type of lending offered matches the purpose, whether a traditional loan or overdraft or a form of asset finance, such as invoice discounting or a leasing deal.

It is, however, becoming increasingly difficult to secure bank borrowings where they cannot be directly secured with an asset.

This has resulted in businesses, and their trusted advisers, becoming much more imaginative when it comes to sourcing finance.

At Inspire Financial Management, we have been assisting our clients to obtain suitable financing arrangements when the traditional banking routes are perhaps not available due to poor levels of security or lack of credit record.

Some of the more interesting options to consider are: ? Funding auctions where individuals bid to lend money to credit-worthy businesses. The business then borrows money from a number of private lenders and cuts out the financial institutions completely. This type of lending is ideal for borrowing up to pounds 50,000.

Many businesses will be aware that HMRC are becoming increasingly effective at debt collection. …