Credit advice for SME's

1. Credit, a mission impossible? www.fincoach.be Slide 1

3. More uncertainty

4. More volatility

5. More regulation

6. More highly demanding customers

7. More (financial) pressureThus: financial figures tend to be worse/more irregular which makes banks less willing to support www.fincoach.be Slide 2

9. Improvement of balance sheet

10. More important role for compliance

11. More efficiency

14. Banks facing themselves liquidity problems

15. (New) credit only for prime customers

16. Economic crisis

17. Makes banks more cautious and more careful

18. Procyclical: the credit policybybanksin itself is sharpeningthe cycle (upward and downward)www.fincoach.be Slide 4

20. More information on past, present and future

21. Stricter criteria, higher margins, more collateral and guarantees, shortening of loan periods

22. More equity requiredOverall, banks are demanding a more professional approachfrom their customers! www.fincoach.be Slide 5

24. Pay-back capacity, improved with guarantees

25. But: banks still base decisions on the past!

26. Clear business plan /strategy

27. Proof of how the business can generate margin

28. Strategy, markets, competition, swot-analysis,…

29. Track record“ Failing to plan is planning to fail” www.fincoach.be Slide 6

31. They think it’s the economic crisis

32. Finance often delegated to accountants or book-keepers and thus no feeling with banking attitude

33. SME’s and traditional financial advisors underestimate the consequences of the new credit policy www.fincoach.be Slide 7

35. Balance sheet, P/L not enough management figures

36. Budgets and forecast cash planning

37. Focus on cash flow operational cash flow

38. Sensitivity analysis

39. Cost analysis and cost control

40. Objectives!

41. Follow-up and monitoring are importantwww.fincoach.be Slide 8

43. The company is the ‘instrument’ that generates the cash, but:

44. Banks want the company to be in a healthy financial position and try to limit the transfer of cash out of the company

45. Accountants advising on optimisation should be well aware of the dangers. www.fincoach.be Slide 9

47. Don’t use the maximum of tax possibilities (might bring more harm than benefits)

48. Don’t mix company assets with personal assets

49. Keep things separated, so no personal guarantees !!www.fincoach.be Slide 10

51. The book also gives a complete overview on the tools the governement provides to facilitate and to help the companies in their financing needs

52. There is a new role for the financial advisors!

53. Make sure your company is financial fit and implement a strategy

54. Improve your relationship with banks by using a professional approachwww.fincoach.be Slide 11