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News - 14 March 2012

Half of Business Loans Rejected Due to Poor Planning

Poor business planning is leading to loan rejections among small firms, research by Sage has revealed.

In the survey of 1,000 small firms, 42% of small-business owners admitted they had no business plan in place at all, while just one in ten said they had used one to secure finance. With the poll showing that one in five loan applications had been rejected during the past 12 months, Sage said the results indicated that firms were failing to present themselves in the best light to banks and other lenders.

Lavinia Newman, Founder of ABDS says:

“Business owners needed a fully robust and up-to-date business plan, failing to have one dramatically increases an SME’s chances of joining the high number of businesses that fail in their first five years.”

Lavinia goes on to add that the lack of a business plan would hinder a small business’s chances of getting finance, suggesting a lack of good financial management and the inability to step back and think objectively about the company. Without one, they are unlikely to get a loan approved, especially if they’re talking about borrowing in excess of £25,000.

If you need any help and advice on Business Plans and Management Reports, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help in all your financial planning and business advice.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net
 

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