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Business Support

Partnership can supply answers

Andrew French, Head of Commercial Centre, HSBC at Team Valley

 Our customers in the North East have been telling us their thoughts and concerns for 2009 in wake of this year’s unprecedented financial events. While headlines focus on bad news, we believe many local SMEs can weather the storm. We are working closely with them to do just that.

 

With market conditions predicted to intensify, there is a mutual responsibility for banks and SMEs to work in partnership, and discuss means to ensure survival through what is expected to be a difficult 2009. 

 

The time has arrived to focus on working capital and provide innovative solutions to cashflow management. Through discussions with SMEs in the North East we understand that no two businesses are the same; each has differing needs and concerns. 

 

But whether the concern is a SME’s own internal credit control or minimising effects of currency fluctuations, HSBC has a range of services which can be tailored to the needs of each business. 

 

As market and credit conditions tighten, suppliers are capable of billing faster and debtors are capable of exceeding previously agreed credit terms, which adversely impact upon a SMEs cash-flow. 

 

The need for effective and efficient cashflow management now is imperative and HSBC’s Invoice Finance service can help. By advancing a percentage of the initial trade invoice to the SME and forwarding the remainder of the invoice once the debtor settles (less charges), the SME can respond quickly and decisively to changes in market conditions. 

 

This service can remove the headache of possible late payment and debt collection. The potential working capital headaches also caused by conducting international trade and purchasing equipment can be simplified by HSBC’s International Trade and Equipment Finance services. 

 

These are only a few of the diverse spectrum of innovative and balance sheet friendly services HSBC can offer small businesses. Then there’s tax saving initiatives. These can be discussed with HSBC’s Financial Planning team. 

 

The wide selection of services and products on offer can help minimise effects of the unprecedented financial events over the coming year. Effects of the global credit crunch and difficulties of the national economy on the financial services industry and SMEs alike are already documented. 

 

But closer to home, diversity of the North East’s economy, with some remnant old traditional heavy industries, predominantly manufacturing and the oil and gas sector, has performed very well recently, especially in exporting. 

 

Let’s be proud that recent UKTI statistics show the North East having outperformed the rise in UK exports. Tourism has also shone, which reflects the impact of One North East’s Passionate People – Passionate Places initiative. 

 

The number of VAT registered businesses in the region continues to rise, as does the total number of enterprises. More importantly - up to press, business survival rates have improved, with more than 70% of new businesses continuing to trade over three years. 

 

These represent significant strides in securing a stable local economy. As the working population are also gaining more skills and qualifications, the North East is well placed to survive the current climate and continue to be an exciting region supportive of both new and existing enterprise. 

 

Government backed organisations and One North East have continued to secure invaluable new investment for regional development which helps keep the North East attractive for businesses. If the region is to remain prosperous for businesses large and small, government backed organisations, established regional entities like One North East, banks and the businesses themselves must work cohesively to weather this storm. 

 

HSBC believes that working closely alongside existing and prospective SMEs customers, we can help plan and manage a business’s financial difficulties appropriately and efficiently. 

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