An overdraft will command an annual arrangement fee plus interest. Expect a minimum fee of 1 per cent of the gross limit, and 3 per cent above the banks base rate. A long-term loan will attract perhaps a 2 per cent arrangement fee of the amount borrowed, plus a minimum interest rate of 2 per cent above the banks base rate. The Enterprise Finance Guarantee Scheme will be priced as for a longterm loan, in addition to 2 per cent per annum payable to HM Treasury for provision of the government guarantee (although in 2009 there was a year 1 discount to 1.5 per cent). Invoice Discounting carries a set-up cost for an initial survey of the debtors of about 1,000, plus an annual fee of approximately 0.35 per cent of annual turnover (minimum commonly 500 per month), plus interest on the amount borrowed at a similar rate to an overdraft. The annual cost can be affected by the volume of debtors, and whether insurance is provided as part of the package. The

Sources of help and support There are a range of professional and other services available. The recommendations below are kept to a small focused list, as this subject could consume a book in its own right!: The Institute of Chartered Accountants in England & Wales: You can search at directory The National Association of Commercial Finance Brokers: You can enlist at specialist The Academy for Chief Executives: a membership organisation where learning, at Ecademy: an online business network at Business Link: a government sponsored organisation offering business advice at accountant their suitable a for securing in finance a of the help and support is available

When should you approach the bank? The earlier the better, but not until you are ready! The test is: can you satisfy the requirements discussed earlier? Also, it is sometimes prudent to consider applying or refinancing when the business is looking particularly strong as there is more likelihood of your application being accepted. In addition, you should be approaching the bank well ahead of your immediate need. It is not satisfactory to submit a proposition and demand an immediate answer that is a sure way to receive bad news. Banks have processes of assessment to go through, and rarely will your manager be the sole decision maker. Some say that is a bad thing, but we believe it is good for customers to have an expert Credit Assessment of their proposition; if the bank supports you it believes in your proposal and that is good backing. So, allow at least several working weeks for the bank to give a considered

Maintaining the dialogue It is important in any relationship to keep in touch. The main considerations are: a) Ensure you comply with the terms of your facility. Often these will include the provision of monthly management accounts, and annual accounts within given timescales simply ensure you do it! b) Banks dont like surprises. If you have a problem, make sure you discuss it with your manager early. At least solutions can then be discussed, and there should be time to implement them. If you deliver bad news late in the day, almost as an ultimatum, dont count on the bank supporting you. c) Communication is the key. Maintain good open lines of communication. Share the good news, make a telephone call when sending your management accounts in, have a regular visiting programme to suit your needs be it two, three or four times a year.