The next phase
Over the last few months we have worked with companies across many sectors to successfully secure emergency funding from banks. When the schemes were announced, the banks were not prepared, and needed to mobilise their front-line teams to immediately switch to handling the mountain of applications that quickly came their way.

Added to the scale of this exercise was the urgent need to devise a credit policy that could be easily understood by staff that ensured some degree of consistency, and the history of these Government-guaranteed schemes had not been a happy one for a few banks who had been reluctant participants in earlier schemes.

We now move to the next phase of the cycle as banks come to terms with the state of their lending books, and seek to manage risk and potential losses. I am optimistic that lessons from the last recession have been learnt by banks, but sadly history tells us that it’s only a matter of time before banks look to align their exposure and return to the current reality.

This might mean curtailing facilities, putting them on demand, and increasing borrowing costs. The need for SMEs to have a proactive relationship with their bank has never been greater.