THE FIRST PIECE of advice I'd give any adviser thinking about how their clients can gain access to finance is straightforward - there is no merit in "bashing the banks" and bemoaning the way things are.

Speculative lending and over competitive pricing got the banking sector in trouble in the first place - let's not pretend that they were the good old days!

Before jumping in to establish a solution, a full review of profitability, the working capital cycle, internal controls and cashflow should be completed.

It's very easy to produce a quick and dirty set of projections which show a loss making business, moving into profit and generating lots of cash. This leads more often than not to dismay when the application is declined!

I'd find it difficult justifying a fee for this type of work. The contrast between a well researched, robustly challenged set of projections is pronounced - it addresses the real issues of whether or not the business has a viable future. Moreover it will lead the client and their advisers to be realistic about what they are trying to achieve. Banks are more robust in their challenge and the advisory community must adapt its behaviour to take account of this.

Upon completion of the financial projections a realistic assessment of risk needs to be undertaken - Banks are looking to mitigate risk wherever possible and are more receptive to proposals that consider risk in a balanced way. One further note of caution - if directors are not prepared to support the business through the provision of security the bank is hardly likely to feel confident! directors need to consider what would happen if problems arise and the banks need to be convinced that there is a "second way out" if the business performs below business plan levels.

It's vital that advisers consider whether the proposal represents a "bankable" proposal at all, or whether in fact private equity is more relevant taking into consideration all of the risk elements and plans for growth.

It's important also that advisers don't stop at the high street when seeking funding. There are a number of good quality niche players getting involved in deals that the high street banks are no longer keen on - this doesn't necessarily make them bad deals.

Be open-minded and be prepared to amend funding structures outside of the traditional loan and overdraft. Often this makes life more difficult in terms of financial modelling but that shouldn't be a barrier in generating the right outcome for your client.

Richard McNeilly is business development partner at Dains

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