Don’t count on the banks to come to the rescue says Check That Company

Check That Company (www.checkthatcompany.co.uk), the online service that provides small firms with a fast and affordable way to get credit checks and company reports, is advising the UK’s small businesses not to rely on the major banks to come to their aid, despite recent reports that they are planning to create a growth fund to support small firms.

Earlier this month, it was reported that a group of Britain's leading banks plan to put forward proposals to establish a capital fund to provide lending for growing small businesses. It is thought that the plans, which are due to be presented to the government later this week, would see six major banks each providing tens of millions of pounds for the fund. Any plans would however, also be subject to formal board approval by individual banks and the Financial Services Authority.

While the idea of increased lending to smaller businesses was to be welcomed, Dennis Scott, Director of Operations for Check That Company, says that directors and owner-managers of struggling SMEs and micro-businesses should not expect the banks to come to their rescue in a hurry.

“This initiative is very positive in principle but small businesses should believe it is happening only when they see it. Collectively, the banks may be well-intentioned and agree that lending to small firms needs to be increased, but I suspect that individually, they will want someone else to do put their money up first. There is also a concern that they may not want to make too much of commitment so any funds that are provided, may be totally inadequate. A few million pounds will, quite frankly, not go very far in terms of stimulating growth. And by the time they get around to actually lending any money, it may already be too late for many firms.

Recent figures from Bacs, the payment services organisation, showed that the total amount of money owed to UK companies in June was almost £25 billion – 28 percent higher than it was six months before. “Small firms cannot afford to wait for the banks to come riding to the rescue on a white charger – at least not until it actually happen. We suspect most SMEs will not be given any extra support – they will need to stand up and fight their way back to growth on their own.”

Scott says that this will mean adopting sensible policies and making sure that they run their businesses efficiently. “One way they can do that is by making sure they run a tight ship, chasing bills in on time and making sure that they don’t take unnecessary risks. These are good habits to get into as well, even when times are good. When we return to good levels of growth, as one day I am certain we will, it still makes sense to keep a close eye on credit risk and ensure that you minimise any potential for bad debt.”

The Check That Company (www.checkthatcompany.co.uk) website provides a friendly, easy-to-use interface that enables small firms to check up on the credit status of companies and obtain copies of filed company documents. You can access the accounts of more than seven million companies, 9.3 million company directorships and over 400 million original document images, detailing financial reports and details of companies in the UK and Ireland. The first report, containing clear risk assessment indicators, costs just £1.99 with a second offered free for first-time users. You can perform basic company searches on the site without committing to buying any reports or images.

Businesses can register with the service simply by going to www.checkthatcompany.co.uk . The service operates on a pay-as-you-go model so it is very flexible and easy to manage and, after taking up the initial offer, registered users will pay as little as £2.49 for full company reports and just 99p each for document images.

For more information on Check That Company please contact:

Dennis Scott Check That Company Tel: 07860 567940 Email: info@checkthatcompany.co.uk Web: www.checkthatcompany.co.uk