Are you covered?

What seemed to be a recurring theme was that getting customers accepted by lease funders was proving very difficult without personal guarantees from business owners – and in some cases even from shareholders who were not directors.

Upon further investigation I discovered that many of the cases were traditionally very low credit risks, such as professionals and local businesses with long trading histories and strong balance sheets. It also appeared that these were businesses that in the past would not have been interested in leasing through anyone other than their own High Street banks.

Well, it seems that those traditional sources of funding have dried up and these types of business are having to turn to outside sources of finance, which at the end of the day are only asking for similar security to that already demanded by the businesses’ bankers.

The long and short of it is that there is actually a massive opportunity here for indies as they can provide not only the ICT solution that local businesses are looking for but also help them find the funding being withheld by their own bankers.

If a business is in good enough health to take on a monthly lease rental commitment over three years then the owners and directors should not be too concerned about offering their personal guarantee.

I had an interesting report back this week from Allied Westminster Insurance Services, which provides insurance-related products and services. It seems that the firm is increasingly being asked by Brigantia members to look at their business insurance as they try to keep costs down.

What is alarming is the number of businesses that believed they had sufficient cover which in fact don’t. This is an extremely worrying matter and I would urge all independent retailers to look closely at their insurance policy documents, as when things are tight a failed insurance claim could make the difference between business survival or failure.

My advice is double check that you are covered for building and repairing on your premises if you have a typical bank-provided shop policy, and also make sure all those connected with the business are covered when working away from the shop, unit or office.

The headline premium should not be the driving factor with an insurance policy – it should be the actual cover. You may find you can keep the premium down by removing things you don’t need while making sure everything that you do need is included. Let me know what you find.