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Bank of Ireland has come up with a novel way to support small local businesses who are seeking information about borrowing.
It is running a series of 100 free ‘Credit Clinics’ in its branches, which will help people to learn all about the loan application process and get tips and advice on what is required in terms of financial documents and business plans.
“Start up small businesses tend to be run by one or two people with strong skills or knowledge about their own business but can find the whole area of finance a bit of a challenge. Some are quite anxious about the approaching a bank for finance and are not sure what is involved in the borrowing process explains David Merriman, Regional Manager, who is involved in the initiative. “Often these businesses haven’t borrowed before. They may have used their own funds to get started and maybe now would like to expand or get access to additional working capital.”
“The Credit Clinic is a new support for business owners. The clinic takes a couple of hours and involves a presentation by a local business banker, bringing those taking part through what they will need when applying for a loan in terms of documentation, accounts and business plan and all the steps involved in the process. The clinic provides a good insight into working capital and how a bank establishes repayment capacity for borrowing.
It means they can come into a branch, meet their local business advisor and talk through what exactly is involved if they want to borrow for their business, regardless of the sector they operate in.
Then part of the clinic is an open forum that encourages business owners to ask questions relevant to them and can chat amongst themselves about the issues they face. “We’re keeping each group small – between eight and 12 people – so that it’s interactive and relaxed and everyone gets a chance to ask questions,” says Merriman.
Twenty two clinics have taken place nationwide so far and David Merriman says the feedback has been really positive. “People like that this service has been made available to get information and ask questions in a supportive environment. There is also the option to set up an individual meeting with the bank afterwards.”
She says the questions most often asked include how long it takes for a credit decision to be made, what kinds of documents people need to produce and how important it is to have an up-to-date business plan.
Part of the reason Bank of Ireland decided to run the clinics is to positively demonstrate to businesses that the bank is lending to small businesses. Bank of Ireland has seen an increased demand for credit this year from small businesses and farmers and wants to ensure it is supporting customers where possible.
During 2012, Bank of Ireland received 55,000 credit applications from businesses and farmers and over 80% were approved.
As a ‘pillar’ bank, it exceeded the €3.5bn lending target for the year to December 2012, providing €3.66bn in new and increased lending to SMEs in that period.
“This was about 20pc ahead of the figure for 2011. The fourth quarter was particularly strong, with around 30pc of approvals completed in that quarter,” says David Merriman.