Written by: HSBC
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Trading conditions have been tough in the South during the recession, with asset volumes and turnovers reduced and demand for finance slumping across all sectors. That said, there are positive signs of recovery thanks, in part to the willingness of the region’s businesses to review their business models and make them leaner and more flexible.
A report from HSBC, The Business of Recovery, examines how businesses have evolved and coped throughout the downturn and looks ahead to recovery. It reveals that, as we head towards the long-awaited upturn, the biggest battles - and greatest opportunities – could be yet to come.
History indicates that more businesses fail in the early days of a recovery than in a recession and unless businesses rethink their approach to funding and finance, the road out of the recession could be rocky. Given the challenging trading conditions businesses have been operating in, it is understandable that they have been financially prudent, but our report reveals - with just 15 per cent of UK-based companies currently seeking external investment - a worrying trend towards short-termism and self-financing.
We are urging businesses to take stock this year: to talk to their banks to ensure they make the most of future opportunities. The misconception still exists that banks aren’t lending to businesses, but this is simply not the case. Our lending strategy hasn't changed - there are funds available and we continue to consider new borrowing requests from businesses across all sectors. We are looking to support firms with good cash flow management, a strong balance sheet, a sound business plan, a well balanced management team, and good banking record and that we looking to develop and grow their business.
HSBC’s message to businesses in the South in 2010 is clear: if you tighten your grasp on the purse strings at the expense of investment, you could unintentionally hamper your recovery and miss out on opportunities to grow and prosper. We are urging businesses to take a longer-term approach; talk to their banks and review their financial options; to make themselves fighting fit to go about the business of recovery.
To contact HSBC's Commercial Banking team or for more information on the services on offer to businesses in the region visit
www.hsbc.co.uk/business or email
yvonnebear@hsbc.com
