Great news for business finance seekers with viable business plans, is that in recent news stories it seems evident that First National Bank (FNB) is bent on lending money to small businesses even though so many entrepreneurs are so reluctant to request funding from financial institutions.
After a few years of tight belts from the banks it seems clear that they are once again saying to small businesses - hey, we are open for business!
SA’s president, Jacob Zuma and Finance Minister Pravin Gordhan have, in recent speeches, alluded to the ability of small businesses to create jobs in 2011, Zuma’s year of employment growth.
The CEOs of FNB Commercial, who run relationship banking segments which focus on providing lending to small businesses, yesterday (Thursday) said they had gained an edge over their competitors over the last year, by making strong strategic decisions. This had included taking equity stakes in their clients and not changing their criteria to extend loans to those businesses.
"We work in a very competitive space but I think our edge has come through us coping with the recession better than our peers did. We have a widely balanced portfolio and did not expose ourselves to assets that were overly risky at the time such as gold course estates," CEO of FNB Commercial’s Premium Business Banking segment, Michael Vacy-Lyle said.
This segment provides funding and guidance to companies with an annual turnover in excess of R10m.
The group also has a segment for companies which record a turnover of zero to R10m each year, called Business Banking.
But businesses are reluctant to take out loans, CEO of the Business Banking segment, Kirsty Davis said.
"We are working in a depressed market with many individuals being highly indebted," she said.
Still, FNB Commercial’s overall commercial advances grew 8% year-on-year from July last year to date, while the industry it operates in saw virtually no growth, the group’s overall in that period CEO Willie Miller said.
The question here I'm sure many of you will already be asking is how much of this is PR and how much of it will come through to you as a business owner going in to see your bank manager for the 3rd time, requesting that more funds will be made available for you to pay your suppliers while clients are slow to pay. I guess time will tell and we will quickly see of FNB's word really does translate to more money being available to you the entrepreneur.
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