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The banking and finance sector has provided over £4.1 billion to SMEs so far through the Coronavirus Business Interruption Loan (CBIL) scheme, UK Finance revealed today, as part of a broad package of support to help businesses through these tough times.

Over £1.33 billion of loans have been approved in the week from 21 April to 28 April 2020. The number of loans provided through the scheme has increased by 8,638 over the same period to a total of 25,262, an increase of over 50%.

The banking and finance sector is providing a range of support to SMEs to ensure they can receive the help most appropriate to their needs, including capital repayment holidays, overdrafts, working capital extensions and asset-based finance.

Lenders have received 52,807 completed applications under the CBIL scheme so far. 25,262 of these applications have been approved to date, while more applications are still being processed and are expected to be approved over the coming days.

Following reforms to the CBIL scheme introduced this week by the Treasury and British Business Bank, supported by regulators, the largest lenders have announced they will not require forward-looking financial information and will only ask businesses for information and data they might reasonably be able to provide at speed. This should streamline the application process and help lenders provide financing to businesses who need it as quickly as possible.

The banking and finance sector is providing a range of support to SMEs to ensure they can receive the help most appropriate to their needs, including capital repayment holidays, overdrafts, working capital extensions and asset-based finance.

The British Business Bank approved four more lenders for accreditation under the CBIL scheme this week, bringing the total number of accredited lenders to 52. This means businesses can now access financial support under CBILS from a wide variety of firms.

The industry is also working closely with the Government and regulators to deliver the new Bounce Back Loans scheme which will make it quicker and easier for smaller businesses to apply for and access the finance they need.

Stephen Jones, Chief Executive of UK Finance, said:  “The banking and finance sector recognises the role we must play in getting the country through these tough times, and staff are working incredibly hard to get money to those viable businesses that need it.

More than £4 billion has been delivered to over 25,000 businesses so far through the CBIL scheme, as part of a broad package of support for SMEs including capital repayment holidays, extended overdrafts and asset-based finance.

The changes to the scheme announced by the Chancellor this week will enable lenders to streamline their application processes and help even more businesses access the support they need.

This extensive support will be complemented by the new Bounce Back Loans scheme targeted at smaller businesses, which lenders are now working at pace to get up and running from Monday.


Case Studies

Chosen Care Group - Homecare services for the elderly

Chosen Care Group ltd, which provides domiciliary care to elderly and vulnerable people in their own homes across Essex, received a £1 million loan from Barclays through the CBIL scheme. The loan will help allow Chosen Care Group ltd continue to provide valuable in-home care during the COVID-19 crisis. The company of 240 employees was nominated for the Great British Care Awards in 2018.

London Drum Company — Drum and percussion supplier

London Drum Company, a supplier of drum and percussion instruments based in Deptford, saw a significant drop in income after gigs and concerts across the world were cancelled or postponed due to COVID-19. The company received a large loan from HSBC UK under the CBIL scheme, which has enabled it to replace its lost income streams and purchase new equipment for its workshop space, an area of the business that can continue to grow despite the current climate. This will help put the business in a strong position to support the UK music industry when the government restrictions are lifted.

Pallet Plus - Logistics company transporting medical goods

Pallet Plus is a logistics company in Colchester, Essex, with 48 employees and a fleet of 28 vehicles. The company has enabled the transport of vital goods throughout the pandemic including Personal Protective Equipment (PPE), medical consumables and ventilators for delivery to the NHS and care homes, as well as goods to supermarkets. Pallet Plus also helped to deliver a donation of Easter Eggs given by the confectionary company Mars to NHS hospitals throughout the UK. The company received a £250,000 overdraft facility from Santander UK under the CBILS scheme, to reduce the impact on their business of potential losses caused by an increase in staff sickness or a decline in trading.

Regency Corporation — Independent group of pubs

The Regency Corporation runs 20 pubs across Sussex, each of which are run independently and tailored to the local community they are based in. The company secured a £250,000 loan from Lloyds Bank through the CBIL scheme after having to shut its pubs and furlough its 150 employees due to the COVID-19 lockdown. The loan will boost cashflow, meaning the business can pay its suppliers and its staff until its furlough grant is received from the government.

SXS Events Productions — Corporate events company

SXS Events Productions Limited, a corporate events company based in Bristol, has had to furlough non-essential staff as events have been postponed until later in the year. The firm recevied a £170,000 loan from NatWest through the CBIL scheme. This loan will give the business as long as possible to plan ahead for when events are rescheduled.

Owning and running a small business is no joke. You need to put in a lot of hard work, not to mention a huge amount of time toiling day in and day out in order for your venture to prosper.

Earning money is just one facet of this – you also have to be able to manage it properly. Quite often, a business can be working well, but because the funds are mismanaged, it may seem like you are losing money.

There are many ways to be wise about this. The main tenet is to keep cash on hand at a good level for your operations to continue working smoothly, and to keep your liabilities at the lowest possible level they could be. There are many ways you can practice this as you work in your business. Two key strategies prove especially relevant.

1. Keep Your Fixed Costs to a Minimum

The best way to decrease liabilities is to be prudent with your spending. Keeping your fixed costs as low as possible can help with this. One example of a fixed cost is your rent. Some aspects to consider for this line item are:

-  The location of your office. If the size of the office doesn’t have to be too big, but accessibility is important for the daily transactions of the business, then it would be wise to choose a smaller space that’s centrally located.

-  The size you need to operate. On the other hand, if the location isn’t really an issue, but the size is of greater importance, then you would usually choose the biggest land area you could afford that is farther from the central business districts. Examples of where this is more applicable are businesses that need warehouses or big facilities to house equipment, machines, or vehicles.

Another fixed cost would be the equipment that you have to buy. If you’re into manufacturing, assess whether it’s more prudent to have your goods manufactured by a third party, or if you are saving more in the long run by buying your own machines. Keep in mind that these assets involve a big amount of cash outlay and that you will have to pay for maintenance as time goes by.


2. Keep the Cash Flow Steady

A business accrues a lot of operational costs – one example is that you need a steady amount of cash to pay your suppliers in order for you to keep your offerings available. However, your cash may be locked in assets that you purchased, or in your payroll budget, or in receivables from your clients.

One thing you can do in order to keep cash flow steady, instead of taking on a bank loan which accrues interest and consequently increases expenses for you, is to sell the receivables that you already have to financing companies. For example, if you are in the trucking business, you can enroll in freight factoring, where you let a factoring company buy your account's receivables so you get cash for them immediately. No need to wait for the 30- to 90-day period you initially have on contract with your clients before you get the cash you need to continue operating.

These are two of the main strategies to keep in mind in order to manage your finances more wisely. As long as you have these principles in mind as you make your decisions, you should find yourself secure, and your business in a pretty healthy financial state.

eCommerce is booming and it looks like it’s here to stay, with some 24 million sites across the globe selling an array of products and services. There are many factors that have led to this phenomenon — from ubiquitous connectivity to the ease of building a website, right through to the millennial desire for more flexible, remote working arrangements. Plus, there's the added attraction of being your own boss from the outset. There is no doubt that the future is looking rosy for e-commerce. Nasdaq research indicates that by the year 2040, around 95% of all purchases will be online. The question isn’t if or when, but how to open an e-commerce business that can grant you the biggest gains for your investment. Below, Karoline Gore shares her advice with Finance Monthly.

B2C or B2B?

The two most common e-commerce business categories are B2C (companies selling items to individual consumers) and B2B (those selling to other businesses). Each has its upsides and downsides. For instance, practically anyone with an enterprising mind and a good business plan can set up a B2C business, since you can keep costs and production low until demand deems it is time to step up your game (and your investment). On the other hand, competition is high in this industry and your team has to be solid (and big) enough to answer questions quickly, deal with customer complaints, and the like. With B2B, orders are likely to be large but may be less frequent. B2B also imposes a stronger pressure on companies to lower profit, since other companies will undoubtedly aim to attract your clients with more attractive prices.


Thinking Out of the Box

If you have a product that is in high demand or you find a niche market for something you are selling, it is key to utilise a model that will boost customer loyalty so you can have a sustained income while thinking of how to expand or broaden your target. One that is working quite well is subscription boxes. Within a period of just four years, this market expanded by an impressive 890%. If you are thinking of launching a subscription company, ask yourself if you can deliver goods on time, do so regularly, and include something that gives your clients real value. This could be an item that is difficult to access (such as a designer or bespoke piece), a discounted item, or a new product to discover. When calculating costs, don’t just think of the goods and packaging. but also of those involved in website and brand design, web hosting, and incorporation fees.

What Companies are Achieving Success?

Some of the most successful e-commerce businesses to date are following one of a select group of models, including dropshipping. Many startups choose to work with this model via Amazon, but competition in this marketplace is tough. It might be a better idea to use a platform like SaleHoo, Spocket, or Oberlo. The latter, for instance, will allow you to see how many page views, sales, and star rankings items have. Other successful models include private labelling (you order the product you develop from a manufacturer then brand, develop and sell it); and wholesaling (to private customers and other businesses). The model you ultimately choose depends on your target market, the nature of your product, your budget, and your short- and long-term goals.

Some of the most successful e-commerce businesses to date are following one of a select group of models, including dropshipping.

Finding Inspiration

Top e-commerce companies that started small may provide you with the inspiration you need. Take a model as seemingly simple but brilliant like Beer Cartel — a craft beer service that introduces urbanites to unique bottles from all over the world. See how sustainability and profitability can work hand in hand in companies like Bundle Baby, which makes eco baby diapers in the cutest colors and prints imaginable. Think of how the founders of Bella Bean Organics used their own farm-made products to enlighten gourmets on everything from homemade pasta to flavor-packed tomato sauce or traditional toffee treats.

The market for e-commerce is so wide that making your mark on it will involve research, vision, and commitment. Do your research before starting, so as to identify market and demand. Opt for a model that is going strong. Finally, put love and care into every aspect of your business, including your branding, social media, and packaging.

As a company leader, you will be doing everything possible to grow your business, but what is the true impact of good, strong branding, and why is marketing so important? Read on to unearth some of the key financial benefits that you will stand to reap when you decide to improve your brand model.

Increased awareness and revenue

Making more people aware of your brand's existence will stand you in better stead in your attempt to increase your revenue, there's no doubt about that. Fishermen and women cast bigger nets if they need to catch more fish, and you need to make more people aware of your services if you want to draw more customers and turn over a greater profit.

You can increase your brand awareness in a number of different ways. If you have a big marketing fund to tap into, you can go ahead and promote your brand on a plethora of different online mediums. Don't worry if you don't have a lot of cash left in your advertising reserve, though. Having a small marketing fund doesn't need to spell disaster for you in your attempt to increase your brand awareness. It just means that you have to be more strategic in your attempt to ensure that your branding model is easy to remember. Companies such as Monzo and N26 have already made a conscious effort to ensure that their product marketing campaigns are alternate and more memorable than most. Monzo have tapped into the impact color has on the memory by making a bright orange credit card available, while N26 have striven to help their audience 'make a statement' by offering them their patented Metal card.


It's not just debit cards that can make your brand stand out from the crowd, however. There are a plethora of ways for you to advertise your business in a memorable fashion. You could, for example, print your company name and logo on items that your consumers are likely to use on a day-to-day basis, such as drinking mugs. Going down this route will help your brand to remain at the forefront of your audience's mind, simply because your consumers will come across it whenever they use the product that you have opted to print on.

Decreased price sensitivity

Price sensitivity describes the way in which demand for a product changes based on how the price of said product changes over time. It is the degree to which elasticity in cost impacts customer buying habits. As expected, price hikes generally act as a customer deterrent in this instance. For example, should a barbershop raise its prices by an extra few dollars to cover certain costs, it will be liable to lose customers due to the fact that the same service is available close by… only cheaper.

Sometimes, due to economic inflation or personal financial difficulties, price rises are necessary. With a good branding model in place, however, you will be able to limit the impact price sensitivity has on your ability to draw customers going forward. By branding your business as a leader in its field, people will still feel inclined to bring you their custom despite the fact that your products/services are more expensive than others in your market. Think about it this way, would you shy away from paying an extra dollar for Coca-Cola's original taste when your only other alternative was a store's own version of cola? Chances are, not likely, and so this is important to remember.

According to Ian Borman, partner at Winston & Strawn this has meant that, for businesses that aren’t well-known or well-placed, or perhaps under significant stress, securing finance has become more challenging than ever.

Below Ian discusses with Finance Monthly the growth in family offices that have been resorting more and more to direct investment, touching on the complexities surrounding direct investment but also the social and ethical benefits smaller businesses can gain.

Direct investment by individuals and family offices is far from a new concept. Decades ago, my grandfather, a solicitor in the North of England, managed a portfolio of small loans to local businesses for a widow. But in the past several years, the needs of private businesses for capital and of family offices for returns have combined to accelerate this area of the finance market.

Historically, this activity has been focused on the SME sector, which itself has played a larger and more significant role in economic growth than one might think. For instance, in the UK small and medium-sized enterprises account for 99.3% of all private sector businesses and employ approximately 16.3 million people. In 2018, UK SMEs delivered a combined annual turnover of £2 trillion, accounting for 52% of all private sector turnover. Many SMEs are conservatively run, with low leverage.

This powerful economic engine is now at risk of stalling; government figures estimate that the number of SMEs in the UK fell by 27,000 between 2017 and 2018. Slowing growth, combined with the implications of the pound’s uncertain strength, are forcing many SMEs to restructure or invest in improved efficiency. In an earlier day, banks provided a ready source of capital to meet these and other needs, but many traditional financial institutions are still facing capital pressures and have withdrawn from large parts of this sector of the market, especially early stage businesses and turnarounds. Institutional investors, for their part, inevitably end up focusing on larger opportunities.

In an earlier day, banks provided a ready source of capital to meet these and other needs, but many traditional financial institutions are still facing capital pressures and have withdrawn from large parts of this sector of the market, especially early stage businesses and turnarounds.

Meanwhile, family offices have been facing their own challenges. Traditional family office investment strategies focused on public bond and equity markets, and to a lesser extent on hedge funds and real estate. However, these investments no longer provide the returns they once did. In the search for higher yield, more and more family offices are thus looking toward the opportunities presented by direct investment.

Indeed, some family offices have taken to the private market with considerable enthusiasm. Because they are independent and less heavily regulated than banks, family offices can be much more flexible in their consideration of investments across enterprise size, geographies and asset classes. As they move toward more direct forms of investment, some family offices are focusing on sectors such as financial technology, or strategies like turnaround. Those offices are increasing their ability to evaluate and manage targeted investments by hiring specialists from banks and private equity firms.

In some cases, family offices are clubbing together, either in an ongoing arrangement or on a deal-by-deal basis, to create a critical mass of investment capital to justify employing a team of people and to provide discipline in the investment decision-making process. (This professionalism in managing SME investments can be seen in other sectors in which family offices have increased their presence, such as investments in sports clubs and oversight of other family assets, such as yachts, aircraft and art.) Family offices are also reviewing and evaluating their organisation, governance structures and support for family members to ensure that offices can successfully navigate the complexities attached to investing directly in specialist markets.


The attraction of direct investment to family offices comes from more than just an alignment of capital. Making direct investments also allows family offices to take the hands-on approach they increasingly favor in selecting and managing their portfolios. This hands-on approach allows family offices to more closely align their investment decisions with the values of the families they represent, making investments in the sustainability space and impact investing particularly attractive. Direct investment also gives family offices the opportunity to leverage their network and expertise to support regional growth.

Family offices have made a serious commitment to direct investments, allowing them to invest in an innovative, creative, and socially conscious way and providing welcome news for the SME sector and the wider economy.

The analysis suggests that businesses typically agree 45-day payment terms from completion of work or delivery of goods. Despite this, almost two-fifths (39%) of invoices issued in 2019 (worth over £34b) were paid late, an improvement on 2018 when 43% of invoices were paid late. However, the number of days an invoice was paid late in 2019 has doubled to 23 days from 12 days in 2018. Invoices paid late were typically larger in value (£34,286) than those paid on time (£24,624).

Long payment vs Late payment

There is a distinct difference between these terms. Long payment terms refer to the time contractually agreed between parties when invoices will be settled for goods and services provided. Whilst sometimes lengthy, they are a reality of doing business. Businesses can plan to cover these cash flow gaps and manage their working capital using either cash reserves or finance tools like invoice finance. Late payment refers to the additional time taken to settle invoices, outside of those contractually agreed at the point of purchase. This is an unknown and unexpected element which can significantly impact cash flow, business plans and even in some cases paying staff or creditors.

Bilal Mahmood, External Relations Director at MarketFinance, commented: “It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long as in 2018, up from 12 days to 23 days. Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency. Separate research we’ve conducted highlighted that 87% of businesses are prevented from taking on more orders because of the cashflow constraint owing to late payments. Overall it seems who you are doing business with and where they are based is important to know for a small business if they need to forecast cashflow”.

“Government measures such as the Prompt Payment Code and Duty To Report have helped create awareness but need more bite.  Until this happens, there are ways for SMEs to fight back against the negative impact of late payments, from having frank discussions with debtors that continuously fail to adhere to agreed payment terms, to imposing sanctions on those debtors, or seeking out invoice finance facilities to bridge the gap.”


Professional and legal services businesses suffered the most with late payment in 2019. Seven in ten (70%) of invoices were paid late, up from 30% in 2018. Manufacturers (57%), retailers (49%) and creative industries businesses were also heavily impacted by late payment of invoices. Interestingly, late payment practices improved for companies working in the utilities and energy sector with only a third (34% of invoices being paid late in 2019 compared to two-thirds (66%) in 2018.


The number of invoices paid late to companies by region was fairly evenly split. Notably, businesses based in the South East (56%) and Northern Ireland (55%) had the highest number of invoices paid late in 2019 and late payment practices worsened from the previous year.

The biggest improvements 2018 vs 2019 in late payment practices were in North West (63% vs 37%), North East (60% vs 40%), Scotland (62% vs 38%) and the South West (61% vs 39%). Additionally, businesses in the North East (25 days vs 11 days) and South West (33 days vs 10 days) had more than halved the number of days an invoice was paid late.


The analysis looked at invoices sent to 47 countries by UK businesses. US companies were the worst late payers, taking an extra 51 days to settle invoices from agreed terms in 2019. German firms took a further 32 days and businesses in China took an additional 10 days. Interestingly, French, Spanish and Italian businesses halved the number of days they paid late from 24 days late in 2018 to 12 days in 2019.

Bilal Mahmood added: “SMEs owners have come to expect long payment terms but late payments are inexcusable. For every day an invoice is late, it’s more time spent chasing payment. This means less time for business owners to focus on growing their business, coming up with innovative ideas and hiring more people, or just paying their staff and bills. Things need to change quickly.”

“We want the UK to be the best place in the world to start and grow a business, but the UK’s small-to-medium-sized businesses are hampered by overdue payments. Such unfair payment practices impact a business’ ability to invest in growth and have no place in an economy that works for everyone.”

Small businesses in the accounting & finance (48%) and manufacturing (45%) sectors are most likely to blame market uncertainty as a barrier to growth. In the agricultural sector, this has traditionally been a more moderate issue but this quarter the sector sees the sharpest rise in concerns over market uncertainty – a relative 48% rise in just six months.

At a time when the CBI has predicted a more positive end of year for business outlook, Hitachi Capital’s Business Barometer asked more than 1,200 small business owners which external factors were holding their business back. It found that 75% of small businesses were being held back by factors that were outside of their control, with market uncertainty affecting three in five. A growing number also cited the falling value of the pound as a big concern in the months ahead, rising from 8% in May to 13% in October.

Key sector findings

Although the finance and accounting sector saw the most significant rise in the number of small businesses feeling that growth plans were being held back by market uncertainty, a growing number of businesses in agriculture and manufacturing admit that market uncertainty is a bigger issue now than six months ago (19% to 31% and 33% to 45% retrospectively).

Market uncertainty Q2 Q4 % rise
National average 31% 39% +26%
Finance and accounting 33% 48% +37%
Agriculture 19% 31% +48%
Manufacturing 33% 45% +31%
Hospitality 31% 38% +20%
Legal 26% 35% +30%
Construction 27% 33% +20%
Media and marketing 39% 44% +12%
IT & telecoms 36% 39% +8%


Other key barriers to growth:

 North East small firms at risk

Small firms in North East were more likely to say this month that they were fearful of market uncertainty preventing them from growing – rising from 31% in May to 53% this month. They were also the most likely to admit that volatile cash flow and red tape acted as significant barriers to growth compared to the national average (23% vs. 14% and 21% vs. 16%).

Age and growth

The research from Hitachi Capital also suggests that the young and most established businesses are most worried about protracted market uncertainty. For enterprises that have been trading for 5 to 10 years, concerns have risen from 29% to 42% - and for those who have been trading for 35 years or more market uncertainty fears have rose from 29% in May to 48% in October.

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance said: “With the upcoming General Election, it seems highly unlikely that there will be a clear position on Government policy or Brexit until after the Christmas break. For many small businesses this will mean planning for a New Year with lots of unknowns as market factors. This could play out with us seeing dip in business confidence at the start of 2020 although, longer term, when the sector has greater certainty to plan against we envisage small businesses will be the first to see change as an opportunity to grow and diversify.”

“One of the remarkable findings from our research over the last year is that, overall, there has been little change in the perceived barriers that small businesses feel they have to overcome to grow their business. Despite a period of unprecedented market volatility and political uncertainty, there has been no significant rise in the proportion of businesses citing red tape, cash flow or access to labour as bigger issues than they were a year ago.

All firms are required to ensure that their employees are competent, and remain competent for their role, but for those firms/individuals that are formally subject to the FCA’s TC rulebook, this provides more guidance around the components a firm might like to include. It is both the responsibility of the individual to meet the required standards laid down by the firm and for the firm to decide what those standards are.

The TC rulebook itself helps firms focus on providing a structured T&C framework to those that need it. The T&C rules themselves detail the obligations on firms to ensure that their internal arrangements cover the full range of activities necessary to ensure individuals become and remain competent throughout their employment lifecycle with the firm. However, because T&C focuses on the individual and the activities they undertake in their role, the type and size of the firm the individual works for is unimportant in the eyes of the regulator. Therefore, whether the firm is a major global corporation or a relatively small SME is irrelevant from the perspective of T&C and ensuring employee competence. However, experience tells us that the larger corporations tend to have very structured processes, with frequent activities and assessments making up their T&C framework. Whereas much smaller advice firms will have a less structured approach to T&C mainly because it is likely that all staff are in one office location, with many of the team involved in each of the advice-giving processes.

This raises differing conundrums for both large and small firms because, from a regulatory perspective, T&C is driven by services offered and not by firm size. Aligned to more principles-based regulation, the TC rulebook allows firms (within boundaries) to decide for themselves the type, level and complexity of the arrangements (which surely is a good thing?).  In practice, however, the activities firms put in place to ensure employee competence in roles captured by T&C are largely the same.

Stage of Employee Lifecycle Employee Activity Firm Activity
Recruitment -    Provide qualifications & references -    Check experience & qualifications

-    Seek satisfactory references

-    Complete fitness & propriety checks

-    Establish competence gaps v intended role

-    Create training plans to ensure employee competence

Induction -    Attend employer induction programme as defined by employer and pass any relevant knowledge tests and/or skills-based assessments -    Provide oversight of all internal processes

-    Educate individuals on the organisation, products and services

-    Induct individuals into the use of all related technology solutions

-    Provide input and test knowledge against relevant e-learning requirements

-    Introduce individuals to relevant customer journeys and accompanying process requirements

Gaining Competence -  Successfully complete T&C activities, CPD &, if necessary, qualifications -  Ensure T&C activities are completed on time & to standard

-  Manage exceptions (breaches)

-  Ensure T&C supervisors are also qualified, trained, undertake CPD & are monitored

Maintaining Competence -    As above -    As above
General -  Design T&C scheme, i.e. activities by stage, sign off procedures, exceptions processes etc.

-  Ensure governance & oversight

-  Produce & use MI to ensure compliance with TC Rulebook

-  Report annually to the regulator &, by exception, for breaches

-  Regularly review the appropriateness of the scheme & adjust as necessary


In larger firms, the activities within T&C schemes may vary for different roles, e.g. investment adviser, mortgage adviser, investment manager and complaint handler (to name but a few), however the overall design of a firm’s T&C framework will largely remain the same. However, with larger numbers of employees in any given T&C framework, larger firms tend to provide more resources in support of the scheme and a greater focus on a more regular range of assessment activities. By contrast, although smaller firms, such as SMEs, will likely have fewer numbers of employees in their T&C scheme, they still have the same regulatory responsibilities as larger firms. In our experience, smaller firms have to focus harder on “not just doing it because they have to”. With smaller numbers, and usually inherently more flexibility, the trick is to extract as much commercial benefit as they can from their T&C framework, focusing on ensuring the framework is configured to improve competence and business performance, not just tick the regulatory box.

In our opinion, smaller organisations now have an ideal opportunity to review and enhance their approach to T&C and employee competence. The opportunity comes in the guise of the incoming Senior Managers and Certification Regime (SM&CR). SM&CR is, or at least should be, well known to firms across financial services. It arguably represents the greatest regulatory shake-up for a generation across the wider financial services industry. Importantly, with a go-live date of 9th December 2019, it should be ‘front of mind’ for firms. (Banks and insurance firms went live in 2016.)

Worksmart have been working intensively in the SM&CR ‘space’ for over three years, supporting both the major industry trade bodies and customers alike in preparing for the incoming rules. Our trade body partners’ experience is that firms, large and small, have invested heavily in their preparations - which is good news.

SM&CR has three key elements to it and the area that most definitely crosses over with T&C is the Certification element of the regime. Employees in roles that can cause significant harm to either customers, the firm or both become part of the firm’s internal Certification Regime. Once in the Certification Regime, employees are assigned one of the eight Significant Harm Functions (SHF) roles defined by the regulator.

Certification Regime – Significant Harm Functions
CASS oversight Proprietary trader
Significant management Functions requiring qualifications
Managers of certification employees Material risk-takers
Client-dealing Algorithmic trading


There is no direct overlap between employee roles in T&C schemes and those classed as SHFs. Indeed, some firms subject to SM&CR who with employees in identified SHF roles, do not need a T&C scheme due to their regulatory permissions and the products and services they provide. However, for many firms, SMEs included, there is a clear overlap between the two independent (but complementary) sets of regulatory requirements.

Additionally, the Certification Regime brings a requirement for firms to operate an “Internal Certification Process” to ensure that there is a formal process of assessment that the firm undertakes against every individual caught by the regime. This must be done annually. To achieve this, the firm needs to ensure, and evidence to themselves, that employees in certification are competent to undertake their role, that they are both trained in and abide by the conduct rules[1] and that they are Fit and Proper. Finally, under SM&CR, a senior executive in each firm is responsible for the firm’s certification regime. They are personally accountable to the regulator for its effective operation. Therefore, whilst they may not personally sign off the annual certification process, they remain accountable. From our experience of working in the banking sector, which implemented SM&CR in March 2016, this has focused minds!

Therefore, the question is how to capitalise on the opportunity that SM&CR provides for firms that, in the past, may have had challenges in delivering a robust T&C framework. Using our experience from working with customers implementing certification who also have T&C schemes, we suggest following three simple steps:

  1. Review activities: Analyse the activities that create and manage employee competence in the T&C scheme. Do the same for the activities designed to underpin competence in your certification regime. Look for overlapping activities, i.e. activities undertaken in T&C that could be used to enhance the evidence base for employee competence in certification, and vice-versa, e.g. using CPD records or qualifications from T&C scheme in the certification regime.

Also, consider activities, currently not used by either that could be used to enhance the ‘evidence base’, e.g. although performance appraisal records are used in many firm’s certification regimes, they are not used by all. In those situations, appraisal records could be a very good source of evidence for both T&C and the certification regime. Doing so will prevent duplication and potentially provide opportunities for enhancing the ‘evidence base’ in each scheme/regime. Of course, as part of this review if evidence gaps are identified, consider activities that can enhance both schemes.

  1. Consider resourcing: Don’t focus solely on activities. Also, consider the individuals involved in those activities. For example, line managers usually conduct performance appraisals. If appraisal records can be used as part of the evidence base in both T&C and certification, this can reduce the workload required to administer the schemes.
  2. Make Change: Use the results of this analysis to win support for updating the activities in your T&C scheme, and this will naturally help you build up your evidence set for your internal Certification Regime.

T&C schemes and Certification Regimes seldom align perfectly, however, experience has taught us that there is sufficient overlap between them in many firms, smaller firms included, to recommend using the activities within each to enhance and sometimes streamline the other.

As stated earlier, although the ‘go-live’ date for SM&CR is 9th December 2019, there will be a strong focus on implementing Certification in readiness for the first annual deadline in 2020. By using T&C activities as the start point for considering how certification can be evidenced, SM&CR project teams can be given a ‘fast start’. In return, however, the supplementary activities that no doubt will be used for evidencing certification can be used to bolster the evidence base for ensuring employee competence in T&C. For SMEs where resource is always at a premium, SM&CR provides a golden opportunity.

[1] The Conduct Rules in SM&CR reflect the FCA’s Principles. There are 4 for all staff and a further 5 for senior managers. For the full list see page 45;

[2] The Conduct Rules in SM&CR reflect the FCA’s Principles. There are 4 for all staff and a further 5 for senior managers. For the full list see page 45;

Challenger banks such as Monzo, Starling and Revolut are built to scale, evolve and improve their offerings easily and quickly, and are doing great extending their customer base. According to Ian Bradbury, CTO for Financial Services at Fujitsu UK & Ireland, they are also now beginning to slowly move towards becoming a full service bank for their customers, as well as branching out their offerings to SMEs.

The way banks make their money is by keeping administration costs low, managing the lending risk and investing wisely to receive good returns. Other income avenues include offering “added-value” services, such as payments, for which they take a handling fee (particularly useful when market returns are under performing, for example in the case of low interest rates).

Four digital-led factors to disrupt banking

Four interrelated digital-led factors are fundamentally transforming traditional financial services: new distribution models; cloud native computing; data enrichment in a hyper-connected world; and exponential increase in the rate of change. These four factors create new ways for banks to operate, to do business and to enhance their offerings for consumers - but they have not fundamentally changed their money-driven banking business model – yet!

Regulators have recognised the value that can be bought by these four factors to banking customers, and have sought ways to encourage the uptake of them – often also encouraging new digital-native entrants into the marketplace. Regulators have also sought to ensure that high-margin services can be “unbundled’, allowing new competition to compete in these areas.

In theory, it should not be difficult for banks to not only survive the arrival of these four digital-led factors – in fact with their financial backing, existing customer base, technology assets and regulatory status they should be able to thrive in this competitive landscape.

This is especially true as other potential non-banking competitors have to overcome complex regulatory challenges – besides not being set up to offer the basic banking business model.

Legacy problems

In reality, traditional banks are struggling to keep up with how the market is moving. The reason for this can be summarised in one word – legacy. Legacy culture, legacy skills, legacy controls, legacy distribution models, legacy systems.

Slowly, this is changing, but until these legacy bottlenecks are removed, banks will struggle to keep up. Those that do not move quickly enough to deal with this challenge are unlikely to survive.

Assuming that traditional banks can overcome these legacy challenges and become the truly agile, low-cost, open-driven, customer-obsessed, data-powered, highly automated businesses promised by the digital-native challenger banks then their traditional banking business model may well also change.

The banks of the future

Banks currently operate a fairly simple two-sided marketplace – they take money from depositors and give it out to borrowers, generating trust in the process. But what they really do is provide a two-sided marketplace for ‘value’ – which is currently focused on money.

Digital transformation potentially allows for other ways to exploit this value-based marketplace, with the data-insights and enrichment coupled with new distribution models creating potentially new services.

Besides this, the notion of value is changing in the digital age, with areas such as data, identity, reputation, authenticity and even perhaps social purpose falling within it. These types of values can potentially be digitally stored, secured, exchanged and exploited in a marketplace - just like money. Maybe for example the banks of the future will become the custodians of your valuable data, both protecting it and helping you generate benefits from it.

Cash flow, the money a business has in the tank to function, can make or break businesses. The latest MarketInvoice Business Insights explored the attitudes of UK SME owners on managing cash flow.

What is cash flow?

Put simply, cash flow is the money your business has readily available to use for day-to-day operations. Put less simply, it is whether your current assets are enough to cover current liabilities. Cash flow is also sometimes referred to as operating liquidity, working capital and current ratio.

Over half (52%) of business owners said they relied on making ad-hoc paper notes, using spreadsheets or relying on text messages from their bank to understand their cash flow position. Meanwhile, 18% reported using online accounting software to do so. Overall, 70% are taking it upon themselves to manage this. Only 30% were using an accountant to manage cash flow information.

Cash flow is clearly something front-of-mind for SMEs with almost half (45%) of business owners checking their cash flow position on a daily or weekly basis to ensure they have the means to continue the smooth running of their business.

Anil Stocker, CEO at MarketInvoice, commented: “Every business needs to know their cash flow position but the disproportionate manual focus on this can distract entrepreneurs from focussing on their business and driving growth. Managing cash flow needn’t be such a taxing affair with the plethora of online tools available today.”

Cash flow constraints mean that 87% of businesses are prevented from taking on more orders. Yet, two-thirds (67%) of business owners aren’t seeking any advice about cash flow. Of the businesses that ask for help, the majority (14%) are turning to their business bank manager. Furthermore, in shoring up cash flow, almost half (48%) of business owners reported increasing their bank overdraft facilities and one in six (16%) used invoice finance to tackle cash flow constraints.

Anil Stocker added: “It’s imperative that business owners get advice to manage their cash flow. We can’t allow UK economic growth to be stunted because of cash flow constraints. Businesses waiting on long payment terms can use invoice finance to help bridge the gap by getting an advance on their invoices and propel their businesses forward.”

First of all, you need to identify the industry you’d like to start your business in. And then you’d have to conduct proper market research in order to decide whether this idea will bring you fruitful results or not. Moreover, you’d have to talk to a few friends that could help you in pursuing your goals.

Usually, people are afraid of starting a business due to fear of failure. But there is another thing that can become a hurdle, and that’s a lack of money. Some people have enough money in their savings account to fulfill their start-up dream. But many people don’t have enough money to pursue their goals. Fortunately, there are several ways you can fund your start-up.

In this article, we’ll take a look at four of the most useful ways you can fund your start-up. And you won’t have to make any sacrifices if you consider these methods.


Start-ups and creative people have been using crowdfunding as a valuable option for years. These individuals don’t waste their time finding angel investors for hundreds of thousands of dollars. They use a creative approach to raise money through smaller contributions from the masses. If you want to launch a product or design without knocking down the doors of venture capitalists, crowdfunding can be the ideal solution for you.

The advantage of using this technique is that it helps in marketing your product way before you officially launch it. You can analyze the feedback and consumer interest to decide if your idea will work in the industry or not. Indiegogo and Kickstarter are the most common crowdfunding websites you can raise funds for your startup business on.

However, you need to understand the terms and conditions of these websites before sharing your idea. For example, Kickstarter only accepts the ideas of individuals that belong to a limited number of countries. Unfortunately, the residents of Singapore cannot avail of this opportunity. However, you can take help from a business partner that belongs to a country that is allowed by Kickstarter.


Getting a grant can be a great way of funding your business in Singapore. The Singapore government is continuously helping SMEs that are willing to bring change to the industry. The first-time entrepreneurs must consider going for the Spring Singapore ACE grant. For every S$3 raised by the entrepreneur, the Spring Singapore will match S$7 for up to S$50,000. In other words, you’d have to raise around $21,429 if you want to receive the maximum grant of S$50,000.

Spring Singapore will give the grant over 2-3 tranches, and they won’t take equity in your organization. The most remarkable benefit of using this scheme is that it also helps in finding a suitable mentor for your start-up in the first year. Depending on the sector or industry, you can use several other local grants that are particularly designed for start-ups. For clean and high-tech companies, the Spring Singapore offers additional funding schemes while the social enterprises can take advantage of the ComCare enterprise fund.

Grants like these, often offered by governments worldwide, can help in giving a great financial boost to your start-up. However, you must carry out the proper research to find detailed information about any grants available.

Incubators and Accelerators

The chances of obtaining seed funding can be increased if you consider getting into a business incubator or accelerator. The major difference between an incubator and an accelerator is that the incubator starts with organizations that are at an initial level of the development process. On the contrary, the accelerator requires you to work with the mentors for a set period before graduating.

Although there are only a few seed funding programs available nowadays, you can get the targeted resources and support for your startup by joining an incubator or accelerator. The chances of growing a startup business are ultimately increased when you work with successful entrepreneurs.


If your friends and family members are unable to provide financial help, you could get help from a bank or licensed money lenders to get a loan. A loan can be the right option if you want to retain full control over your company, as it makes you feel free from giving equity to investors.

OCBC has designed a collateral-free loan program that is available for start-ups. The loan is known as the OCBC Business First Loan. It provides you with access to $100,000, and this loan is particularly available for companies that have started around six months ago. The only problem with this loan is that it can only be approved if you have a guarantor. If you have a completely new and untested business model, you must be very careful about taking out this loan.

Similarly, you must think carefully before taking out a loan if you are not expecting revenues in the short to medium term.

Another useful option to fund your startup is taking out a personal loan. Some banks like Standard Chartered CashOne offer a low minimum income requirement with attractive interest rates. Similarly, the ANZ MoneyLine Term Loan comes with the interest rates of as low as 6.6% per year.

Entrepreneurs can now fulfill their start-up dream with the help of these funding options. You should do some research to find out the funding option that will better accommodate your needs. We recommend going for the options that come with lower risks. Thus, you’d be able to focus on the growth of your business thereon.

For many small enterprises an injection of cash is required at some point - either at the start-up stage, in preparation for growth, or simply to stay in the game.

However, many small business owners set out with blind optimism and underestimate the level of funds required to keep a business afloat. Oliver Spevack, Chartered Accountant and co-founder of OS Accounting specialises in supporting start-ups and SMES.

He says: “Poor financial planning can cripple a small business and lack of funds is one of the common reasons why new businesses run into problems and fail.

“So many small businesses that come to us have no business plan and no idea how to raise capital. They are completely unaware of the grants and tax relief schemes available to them.”

Funding can make or break a small business. Let’s take a look at the options available.

Family and friends

The cheapest way to borrow money is by getting an interest-free loan from family or friends. You may be able to negotiate a longer-term payment plan than you would get with a traditional loan through a bank, or agree to pay the money back in a lump sum once your company reaches a certain profit or turnover target. You probably won’t have to give a share of your business away either.

Social media crowdfunding

Crowdfunding has become an increasingly popular option for funding a small business in recent years. It does, however, require a strong promotional strategy, increased transparency, and the possibility of giving up a stake in your business. See more on the different types of crowdfunding and the best crowdfunding sites to launch on here.

Business loans

A wide range of lenders offer loans to small businesses, from traditional banks to online specialists. Small business loans are also available from the government. The British Business Bank (the government’s publicly owned development bank) was set up to help small businesses in the UK access funding. The bank offers start-up loans from between £500 to £25,000 and helps small enterprises understand and access funding options.

See some frequently asked questions on small business loans here.

Angel investors

Not a suitable option for businesses that want to retain 100 per cent control over their business, but angel investors do offer funding opportunities and can often bring some expertise to small businesses.

Essentially, an angel investor is a person, or group of people, who provide funding in exchange for a part of the business. They can be silent (i.e. just provide a capital injection) or can be active and offer advice and expertise to help grow the business.

BBC2’s Dragons’ Den has become the template for what happens when a small business needs investment from an angel investor.

Read more on the pros and cons of angel investors here.


Venture capitalists

Venture capital is similar in its concept to an angel investment – there are, however, differences. Essentially both offer funding in exchange for a share of the business. The main difference is that angel investors work on their own, whereas venture capitalists are a division of an organisation or an organisation in their own right.

Venture capitalists are only interested in businesses that are likely to make a high return. They look for small businesses that have the potential to grow into large companies.

Research and development grants

Small business grants are one of the best sources of funding available to start-ups, developing and established small businesses. There are many private and government schemes available. The qualifying criteria varies hugely, but there are literally hundreds of schemes from Princes Trust Grants to global investor, Unltd Social Enterprise Funding.

Many of the grant schemes available to small businesses are industry or location-related, such as the Energy Entrepreneurs Fund which supports the advancement of energy technology or council-run business development grants, which may also have industry-related criteria.

Tax relief schemes

Not strictly funding, but tax relief schemes are another underused resource that can provide a considerable boost to a small business’s funding pot. The tax breaks commonly overlooked by small businesses include:

Let’s take a brief look at each of these.

R&D Tax Credits – a government scheme designed to reward and encourage greater innovation across the UK business sector, which can amount to tens, even hundreds of thousands of pounds, every year. See more about the government scheme here.

Annual Investment Allowance – a government scheme offering tax relief to British businesses on qualifying capital expenditure, specifically on the purchase of business equipment.

EIS and SEIS – these are government backed investment schemes that encourage investment in small and medium-sized companies.

Enhanced Capital Allowance – the government ECA scheme was introduced in 2001 to encourage businesses to invest in energy-saving equipment. Businesses can claim 100%  first year tax relief on qualifying equipment.

Employment Allowance - The government’s EA scheme was introduced in April 2014 to incentivise recruitment in smaller businesses - this is worth up to £3,000 per year to set against an employer’s Class 1 NIC bill. Single director companies without employees do not qualify.

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