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http://www.ukba.co.uk

New SME funding - EFG Scheme

It has been announced that as of the 14th of January 2009 until March 2010 there is going to be an new initiative called the Enterprise Finance Guarantee (EFG) Scheme which will assist businesses with a turn over of up to £25 million with a loan of up to £1 million, 75% will be guaranteed by the Government and 25% will be unsecured and at the banks’ risk. This will of course be based on the applicants meeting certain criteria and for companies that are creditworthy.

There are some very interesting changes to this scheme compared to the Small Firms Loan Guarantee Scheme as the SFLG could not be used to cover debt; many of our clients seek a way of consolidating various debt lines that they have and this was impossible to do with the old scheme. At first sight the sector industries that are ineligible seem to be greatly scaled down, we will of course have to wait to get final information.

What is EFG Scheme?

This is the Government's new £1bn Enterprise Finance Guarantee (EFG) Scheme will support up to £1.3bn of new lending by banks to eligible SME’s with working capital or investment needs.

Which companies will benefit from the scheme?

The EFG Scheme is going to be open to businesses with an annual turnover of up to £25m, seeking loans of £1,000 to £1m, which can be repaid over a period of 10 years.
Most businesses in most sectors will be eligible for the scheme. However, state aid rules exclude businesses in the agriculture, coal and steel sectors

What sorts of lending will this cover?

The guarantee can be used to support refinance existing loans, new loans or to convert part or all of an existing overdraft into a loan to release capacity to meet working capital needs.

How much of the loan is the Government going to guarantee?

The Government will guarantee 75 per cent of the loan.

How long will the scheme run for?

EFG will be available from Wednesday 14 January 2009 and will be available until March 2010.

Who are the participating lenders?

Barclays
Clydesdale/Yorkshire Bank
HBOS
HSBC
Lloyds TSB
RBS/Natwest
Northern Bank


http://www.ukba.co.uk

SME statistics

There were an estimated 4.71 million private sector enterprises in the UK at the start of 2007, an increase of 212,0003 (4.8 per cent) on the start of 2006.

These levels are the highest since the time series began in 1994. These enterprises employed an estimated 22.7 million people, and had an estimated combined annual turnover of £2,800 billion.

Small and medium-sized enterprises (SMEs) together accounted for 99.9 per cent of all enterprises, 59.2 per cent of private sector employment and 51.5 per cent of private sector turnover.

Employment in SMEs is estimated at 13.5 million, 0.3 million (2.0 per cent) higher than in 2006. Turnover in SMEs is estimated at £1,440 billion, £83 billion (6.1 per cent) higher than 2006. Almost a quarter (24 per cent) of all UK private sector enterprises operate in the Business Services sector (SIC2003 Section K).

Read more: http://stats.berr.gov.uk/ed/sme/smestats2007-ukspr.pdf

http://www.ukba.co.uk

How to defer tax!

Some 20,000 businesses who contacted the Business Payment Support Service have between them arranged to defer tax of over £350m. We provide some practical pointers for using this new HMRC service.

A recent HMRC press release gave some information about the activities of the Business Payment Support Service (BPSS) since its launch in November 2008. By 14 January, 20,000 businesses who contacted the BPSS have delayed paying a total of more than £350m tax.

The BPSS is designed to help people who are struggling to pay their tax on time, by setting up suitable payment arrangements. The taxes it can deal with include income tax, corporation tax, PAYE, National Insurance contributions and VAT. The phone number is 0845 302 1435 and it is open seven days a week (8am to 8pm Monday to Friday, 8am to 4pm at weekends). Further information is available on the BPSS page of the HMRC website.

The following points may be useful:

Although the service is aimed primarily at businesses, it can be used by any taxpayer.

Once payment terms are agreed, HMRC will not charge late payment surcharges on payments included in the arrangement, although interest will continue to be charged where it applies.

The BPSS can only deal with new requests for time to pay, not with existing debts where there the taxpayer is already in contact with HMRC.

HMRC will have three main questions for callers:

• What do you need to pay at the end of the month?
• Why can't you pay it then?
• When will you be able to pay?

In the majority of cases, HMRC will be able to make a decision in around 10 minutes.

For larger liabilities or more complicated cases, HMRC may need to have a longer discussion or request more information.

HMRC ask callers to have the following information to hand:

• Your tax reference number.
• Details of the tax that you have, or will have, trouble paying.
• Basic details of your businesses income and outgoings.

The Tax Faculty also suggests that:

• Non-business taxpayers should have details of their income and outgoings.
• All callers should consider what sort of payment terms they could sensibly manage.

http://www.ukba.co.uk

Help for small businesses

Various funds have been made available for small businesses:

Working Capital Scheme
£10 billion available to assist companies with T/O less than £500 million, who are having Working Capital Problems.
50% is guaranteed by the Government

Enterprise Finance Guarantee Scheme
£1.3 billion earmarked for loans to companies with <£25 million T/O and the loans are between £1,000 and 1 million!!

Capital for Enterprise Fund
£75 million (£50m from Government) enables companies urgenbtly needing a cash injection to sell debt in return for a stake in the business. Firms with a turnover of <£50 million will be able to obtain equity and quasi equity investment of between £250,000 and £2 million.

http://www.ukba.co.uk

Health & Safety Legislation Update

On Friday, 16 January 2009, the Health and Safety Offences Act 2008 came into force, increasing the penalties that can be levied on employers and providing courts with greater sentencing powers for those who break health and safety law.

The Act gives lower courts the power to impose higher fines for some health and safety offences.

The effect of the Act is to:

:: raise the maximum fine which may be imposed in the lower courts to £20,000 for most health and safety offences;

:: make imprisonment an option for more health and safety offences in both the lower and higher courts;

:: make certain offences, which are currently triable only in the lower courts, triable in either the lower or higher courts.

The Health and Safety Executive (HSE) says that the Act should place no new duties on employers or businesses and that it is not changing its approach to how it enforces health and safety law.

The new penalties in the Act are not retrospective and will not apply to offences committed before it came into force on 16 January 2009.

(Courtesy of the FSB)

Full details here: http://www.opsi.gov.uk/acts/acts2008/ukpga_20080020_en_1
http://www.ukba.co.uk

Snippet: Confidence in Gordon Brown

28% of businessmen say they have confidence in Gordon Brown’s abilities – down from 42% last October; 46% trust David Cameron and 41% favour Lib Dem treasury spokesman Vince Cable. Source: Independent

http://www.ukba.co.uk

A Challenging Time For Business Leaders

The British Chamber of Commerce recently surveyed 6,000 companies employing 680,000 people about the economy.

Sales, employment prospects, manufacturing, cashflow and investment were now all at record lows, the data revealed.

"It is clear that the UK economy is facing a very serious recession, and the downturn is deepening at an alarming pace," said the BCC report. "The results highlight a frightening deterioration in the UK economic situation."

Read more here: http://www.britishchambers.org.uk/6798219243425521400/economic-survey-results-are-worst-on-record.html

For a video interview from the BBC - click here: http://news.bbc.co.uk/1/hi/uk/7825632.stm

http://www.ukba.co.uk

SMEs to benefit from EIB cash injection

European Investment Bank (EIB) has signed three new generation EIB loans for small and medium sized enterprises (SMEs) in the UK for a total of GBP 650 million (EUR 720 million). Three UK banks - Royal Bank of Scotland (RBS), Barclays Bank and Bank of Scotland (HBOS) - will act as financial intermediaries for the EIB funds, passing them onto SMEs with projects which further EU policy objectives. All three loans were signed during December and SMEs should start to benefit from EIB finance early in 2009.

Read more: http://www.tradingmarkets.com/.site/news/Stock%20News/2113840/

http://www.ukba.co.uk

Entrepreneurs burn the midnight oil to survive the recession

The latest research from entrepreneur think tank the Tenon Forum reveals that more than a quarter (28 per cent) of UK entrepreneurs have increased their working hours as a direct result of the economic downturn, adding eight hours on average to their working week – the equivalent of a full working day.

Read more here: http://www.tenongroup.com/Press/2009/Press090105.asp

http://www.ukba.co.uk

Bosses face prison for neglecting Health & Safety Offences

Careless workers and their bosses could be more likely to go to prison than muggers when new health and safety legislation comes in to force this week, lawyers have warned.

The new law will mean that serious breaches of health and safety rules that were previously punished with fines can now attract a custodial sentence of up to two years.

The wide-ranging powers also mean that an employee who has contributed to a health and safety offence could face a prison sentence even if no accident or injury occurred as a result of their actions.

See rest of article: http://business.timesonline.co.uk/tol/business/law/article5500453.ece 

http://www.ukba.co.uk 

Economic Outlook - HSBC 2009

The key points from the recently published Economic Outlook from HSBC were as follows:

• The global economy is facing its biggest crisis since the 1930s. Savage deleveraging and financial system failures have caused a downturn on a par with the oil shocks of the mid 1970s and early 1980s. The task facing governments and policymakers is being made more difficult by the hoarding of cash and fears of deflation.

• Recession is now a reality for the UK for the first time since 1992. The heavily indebted consumer sector has been retrenching, and GDP growth has turned negative. Among the consequences that are now starting to emerge are rising unemployment and more business failures.

• The authorities have responded decisively and early in the cycle. Interest rates are at their lowest since 1951, sterling has hit an all-time low against the euro and fiscal policy has been loosened appreciably. These were the levers that worked in 1992 but their effectiveness during 2009 could be blunted by continuing problems in the financial sector.

• All industry sectors are showing signs of strain and the key surveys report confidence levels sinking across the board. All regions are therefore being affected. HM Treasury has predicted a short and shallow recession (‘V’ shaped) but it is more likely to be longer and deeper (‘U’ shaped).

To read the whole document - please click here: http://www.ukba.co.uk/HSBCOutlookJan2009.pdf

http://www.ukba.co.uk

Nine basic steps to prevent Identity Fraud

Identity Fraud is one of the fastest growing crimes.

Identity Fraud is becoming a major problem and anyone can have their identity stolen and in a recent case in the paper the thief was the person's sister.

With the amount of information about you on the internet and held by all sorts of organisations including the government, banks and suppliers (i.e. supermarkets etc.) you need to manage the information you are giving out and try to keep it to a minimum.

The precautions to be taken are:

1. Never give personal information to someone who calls you on the telephone. Especially if you are not expecting the call. Banks, shops and companies may do cold calling for market research. If they say it's for market research always ask for the phone number of the supervising body.

2. If you are interested in what they have to offer. Either check their identity by calling them back or ask them to put some information in the post.

3. If you have not had dealings with a company. Do Not give them personal information.

4. Always destroy any documents which a fraudster could use.Bank and Credit Card Statements, cheque book studs and till receipts should either be shredded or burned and the ashes broken up.I have an incinerator in which I have a fire about once a month to burn all my confidential waste. For me this includes accounts and envelopes which my name and address.

5. When you get emails requesting personal information. Delete them.

6. Don't respond to emails that offer you amounts of money for using your bank account to transfer cash from banks in third world countries. These are scams and people have lost large amounts of money.

7. Always arrange for your mail to be re-directed when you move to a new address.

8. Keep a list of all your Debit and Credit Card numbers so that if you loose one you have the details to cancel the card. The earlier you inform the bank of a lost card the better.

9. Always check your financial statements, banks, credit cards etc and if possible check them online. The quicker you spot an error or misuse the better the chances of stopping it escalating.

If you follow the above steps, you have a good chance of avoiding identity and other frauds.

http://www.ukba.co.uk

UK growth at lowest level since 1990

The UK economy shrank during the third quarter of last year, according to figures from the Office for National Statistics (ONS). Gross Domestic Product (GDP) was down by 0.6% between July and September, when compared to the previous quarter. It represents the first time since 1992 that the UK economy has contracted.

To read more on this story see:
http://www.statistics.gov.uk/cci/nugget.asp?id=192

www.ukba.co.uk

One in twenty UK firms could fail during 2009, forecasts FPB

Nearly one in twenty small businesses could go bust this year as recession sets in, according to a representative of the Forum of Private Business (FPB). Phil McCabe told the Sunday Times that 200,000 of the UK’s 4.7 million small firms could fail during 2009. During the last recession, between 1991 and 1992, 100,000 firms went bust. Mr McCabe added that the rate of failure among small firms would depend on whether the banks resume lending to viable businesses.

For more on this story see:
http://business.timesonline.co.uk/tol/business/economics/article5439216.ece

www.ukba.co.uk

Meetings Bloody Meetings

“Meetings are a waste of time. I’m just too busy to spend time in meetings. I’ve got too much work to do”. Sound familiar? And when I hear this I often do see people flying around frantically fire fighting, often getting lots of interruptions and not being at all sure where they are going. Does that sound familiar too?

I like to think of meetings as gaining leverage for myself. Making sure that people know what I am trying to achieve and helping me forward. Likewise I like to know what others are trying to achieve and helping them forward. This way I cut down on my interruptions and know I will have a focussed discussion with my colleagues…so I don’t need to interrupt them and hopefully they don’t interrupt me.

It's not that I’m anti interruptions – what I call corridor conversations. There will always be the unexpected and that’s fair enough. Its just that I’d rather be better organised than that and have my mind clear to discus important matters when my mind is really focussed on the topic, rather than in the middle of five million other important things I am trying to achieve.

So what are the constituents of a good meeting?

• A leader. All teams need leaders. Leadership styles need to change with the situation. In the middle of a crisis we need a dictator – just ****** do it. But more often it is someone who can set up a discussion, draw in different opinions and only then conclude. It may be a good idea to rotate the leadership of a meeting – it helps people develop and enables them to run meetings as they think they should be run. It also helps them understand that running meetings is not as easy as they might think – which might make them more supportive at the next meeting!

• A plan: The meeting needs to know its direction. How long the meeting is going to take, what we are going to discuss. Too often meetings try and boil the ocean all at once. Provided I know that the topic is coming up in the meeting I don’t need to bring it up in the middle of another topic. It is the role of the leader to manage this plan.

• Minutes: These are a useful way of asking people to discuss the issue outside of the meeting – or to do something. It enables the meeting to move on and not get bogged down in the detail. They are also a good reminder of what was agreed.

How long should a meeting last?

My view is that anything more than two hours is beyond my concentration level. If it needs to be more than that then there should be a scheduled break. That way people stay focussed and therefore effective. It can be very useful to make it clear that the meeting will last no longer than a certain time. This can be achieved by telling people that we will stand up at a certain time. It is amazing how much more quickly meetings go when people are standing up!

How often should a meeting take place?

For management teams my view is that we should meet once a month on a rhythm that fits the business – the third Thursday of the month is quite a good time. However in some situations that require tighter management, once a week is effective – first thing Monday morning, or Friday morning. These become more tactical meetings dealing with day to day issues. I find them more effective with junior staff, less necessary with experienced staff or teams.

How to deal with follow ups.

How do you get people to do the actions that they have agreed to in a meeting? Its no good leaving it to the next meeting to review whether people have done the actions they agreed from the last meeting. I have found it effective to re-circulate the minutes a week before the next meeting. Instead of Portrait I set them up as Landscape with another column for people to record what they have done with the action.

All I am really looking for is “done” – or an explanation on progress. If people haven’t done the action they are often reminded to do it before the meeting – if nothing else to avoid the embarrassment of saying they haven’t done it. Once everybody has commented the completed follows up can be re-circulated prior to the meeting. If people still haven’t done their action by then I have found that they will now try to get it done.

But what if they still haven’t done their action?

This is where the leader has to step in and deal with the individual on a one to one basis. There is probably some more fundamental problem that needs addressing. Maybe they are struggling with their work load – and maybe not delegating effectively – and maybe they need help with running their own meetings.

Team briefing.

Once the team meeting is over, it can be a good idea to make sure that the key messages/
decisions are communicated onwards. Often those who attend important meetings don’t realise their responsibility to pass on information at their own team meeting. A written brief may be the most effective way of doing that – or sometimes the minutes can be a useful reminder.

Do get the minutes out quickly.

I have always favoured quick and cheerful rather than slow and 100% accurate. Fundamentally minutes are there to remind people of what they agreed to do.

What do I do if some people can’t attend?

My view is that the meeting should run anyway. From time to time people can’t attend. However it may be important to deal with persistent offenders on a one to one basis.

One to one meetings

There is a place for a regular team meeting and there is also a place for a regular one to one session with each direct report. I recommend setting two hours aside in your diary each month for each person that works for you – just as you do for the team. This is a more flexible date between two people. My view is that it is flexible, but must happen sometime. So either person can change the date but must organise another time.

I find the one to one session is much more personal. However I do the same things as in a team meeting – plan what I want to cover, take notes, review actions. It is much more of a mentoring role, particularly with senior staff. It enables me to get buy in to my plans; it enables difficult issues to be discussed in a calm way; I often use it to get the staff member to set their own goals and targets – which means I have their buy in to the way forward right from the start.

In my experience I have found that if I have these two types of meeting running each month I am left alone for the rest of the month to get on with my own work. It reduces the level of interruptions and instils a sense of order. It enables more forward thinking which in itself prevents some of those crises.

Meetings, bloody meetings? I wouldn’t be without them!

http://www.ukba.co.uk