I had been running my first business for almost a year; things seemed to be going well although my bank account looked decidedly unhealthy. I was chuffed that that my business had made a year without going down the pan. It had not been easy; I was working all hours of the day, waking up at four in the morning to do the paperwork, usually concerned with my business account and correspondence from the bank’s business advisor.

Considering you have to beg and plead for the loan that the bank gives you there is no let up in the information they require about where their funds are and what you are using them for. Sadly I was beginning to think that a different business account with a different bank may have been a better idea. After all I had been wooed into this account by the introductory offers and had neglected the long term picture.

This is an easy mistake to make when there are so many choices of business account on the market. It made my head spin just trying to choose one. No wonder I had ended up simply looking at the offers and neglecting the small print, it is easy to do when you have a pile of pamphlets in front of you so large it blocks the sunlight.

I can hear what you are thinking; does this man have any business sense? Surely he would spend as much time as possible choosing the right account for his business? Well I challenge anyone to sit there and trudge through leaflet after leaflet of the same bank dialect and stay focused on the task at hand. It is an unenviable job at the best of times but when you are under pressure to find a bank account it is far too easy to take the best option after a light skim read of the details.

Overall though I do not think if I spent another week working my way through the epic pile of pamphlets on my coffee table I would have found a better offer for my business. To be fair to the bank although they were on my back a lot of the time I cannot blame them, it is their money after all and they are simply taking care of their investments.

The business advisor that came as part of the account package had been a real help in the first few months of operation. He understood the problems that fledgling businesses faced and supported many of the decisions I had made. A pity however was the account package had only provided this service free of charge for the first year and I was now worried that with the year nearly up, I would lose the expertise of my business advisor.

My fears though were unfounded as the business advisor soon made it clear to me that although I would have to pay for his services from now on; the amount was trivial, especially compared to using an advisor from the open market.

Overall I can say that the bank had been helpful at almost every step of my journey. Their insistence of sending reams of paper to my house was simply prudent financial practice. To be perfectly honest, it had taught me a great deal about how to run my own business along more logical and productive lines.

So the introductory offers were close to their expiration, a few percent here and there would make a slight difference to the account although I was sure it would be negligible. I had gotten to know both the business advisor and bank manager well here and felt they would support my business wholeheartedly.

I had chosen my account on a bit of a wing and a prayer, but it seemed it had paid off, even though, in future I would take more care when choosing an account.

Shaun Parker is an experienced businessman who places great emphasis on choosing the right business account for a company. To find out more please visit http://www.lloydstsbbusiness.com/accounts/index.asp

According to government statistics, every year approximately 600,000 new businesses are started in the United States. Each entrepreneur optimistically begins with the same goals in mind…making money and growing the business. Often start-ups need to look for business financing to acheive these goals.

Lack of Finances

Small business owners often face the roadblocks to success that have caused many new businesses to fail throughout the years. The primary reason for this is a lack of finances. A lack of money can hinder a new business from competing with older established businesses due to not possessing the proper equipment, supplies, or other resources which can enable them to take advantage of new opportunities.

Don’t Miss Out on Opportunities

Often, there are huge opportunities in the course of time that arise for the business start-up. It can be frustrating when the only thing keeping the business from capitalizing on the golden opportunities is a lack of cash flow to compete for the big contract. That is where an unsecured business line of credit can really make a difference.

How A Business Line Helps

An unsecured business line of credit is a great source of capital for the small business start-up. When referring to the term “unsecured”, it means that the money does not require a show of collateral in order to get the loan. In fact, much like a credit card, the money provided can be used only as needed and without the danger associated with the high interest rates, fees, and penalties of credit card debt.

Keep in mind, however, that an unsecured business line is not to be taken lightly. It should not be sought after without a firm business plan and opportunity for profit. Just remember…the money must be paid back. However, also consider the fact that the risk of personal property loss is eliminated. This is obviously beneficial.

One of the major benefits of an unsecured business line for a business start-up is the speed at which the line is funded in comparison to a traditional loan based on collateral. This is because of the fact that there is significant time saved in the fact that a property appraisal is not necessary. However, the speed of financing can also depend on the FICO score of the business owner. Of course, if a business owner has bad credit, then it is necessary to have credit repair which can slow the financing process down.

Overall, an unsecured line of credit is a valuable tool for business start-ups. Not only can it help the business in its infancy, but it can boost the bottom line expontially. Don’t seek a bank loan or look for a new credit card to max out. Grow your business start-up with a business line of credit. You will not regret it.

Author Chris Chandler, owner of America’s top business loan website, Wall Street Capital Financing. Apply at business line of credit.

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The handling of the liquidity crisis at Northern Rock by the UK authorities has become a major embarrassment for the government and Gordon Brown in particular. The new Prime Minister has always stressed his achievements as Chancellor of the Exchequer during the period 1997 to 2007, while he was waiting in the wings for Tony Blair to retire. Yet within several days, his reputation for prudent economic management has been undermined.

The problems at Northern Rock, and other financial institutions, did not appear overnight. The crisis in the USA subprime loans market was well documented, as was the fact that this dodgy debt had been repackaged and sold on to UK and EU banks. Major banks in Germany as well as Barclays Bank in the UK are rumoured to have significant exposure to these dubious assets.

Northern Rock is a proactive UK mortgage lender who attracts some 73% of its funds from the wholesale market, and only 27% from private depositors. The subprime banking crisis effectively dried up the source of these funds from other mainstream UK banks and financial institutions.

What differentiated the UK from the USA and the EU, was the response of the respective governments and central banks. The Federal Reserve and the EU central bank were significantly easing liquidity pressures in financial markets during the summer of 2007. The Bank of England adopted a laissez faire posture and made statements to the effect that financial institutions should not expect to be protected by the Bank of England if they make imprudent decisions.

When the Northern Rock crisis became public and the Bank of England announced support, its position was endorsed by the UK government and the Chancellor of the Exchequer, Alistair Darling. However, ordinary investors were not persuaded by the Chancellor’s bland assurance that Northern Rock was solvent, and there was a run on the bank.

The Financial Services Compensation Scheme means that savings up to GBP2,000 are protected in full, and the next GBP33,000 at 95%. Beyond GBP35,000, there is no protection. Savers who were in a line outside Northern Rock branches often had deposits in excess of GBP50,000 invested in the bank.

The media coverage of panicking depositors who took no notice of the assurances of the Chancellor of the Exchequer evidently riled Gordon Brown, the Prime Minister. On 17 September 2007, the government announced that all savings in Northern Rock would be protected. This had the desired effect, and the run on the bank was contained.

On 19 September, the Governor of the Bank of England made a major U-turn. Only the week before, he was stating that central banks should only intervene when there are ‘economic costs on a scale sufficient to ignore the moral hazard of the future’.

In plain language, what this means is that intervention by the Bank of England is a last resort. It should only take place in dire circumstances. If the Bank bales out any financial institution which experiences problems, due to its own stupidity or imprudent policies, the Bank’s support could be construed as endorsing or even rewarding bad practice and could encourage other institutions to take excessive risks in the pursuit of profits.

The Bank of England has now announced a package of measures which will effectively enable all UK banks to weather the current crisis, regardless of whether they have operated imprudently or not.

This has now moved the focus of attention away from the troubles of Northern Rock and has led to questions concerning the Bank of England’s handling of the crisis.

This U-turn raises a series of intriguing questions. Firstly, if these measures had been put in place two weeks ago, would the crisis at Northern Rock have been averted?

Although this is a hypothetical question, the answer is probably in the affirmative. Whether such a move would be good for the UK economy is probably to be answered in the negative.

Secondly, could the problems at Northern Rock have been handled better? The answer is undoubtedly yes. Northern Rock would have been an attractive target for takeover activity. However, the damage to the brand name is now irredeemable and there is little likelihood of a takeover at an early date. In any event, the brand name is likely to be a liability rather than an asset.

Thirdly, is the Bank of England to blame? While the Governor of the Bank was forced to make an embarrassing U-turn, the hidden hand of the government is easy to detect. There are few precedents for UK banks going bankrupt in recent history. While London and County Securities and other secondary banks went bankrupt in 1973, none of these companies was a major player on the scale of Northern Rock. However, in 1973, the Bank of England did launch a lifeboat scheme in order to avert a domino effect. It was rumoured at the time that Nat West Plc was at risk.

The 1973 lifeboat scheme is obviously well known to current Bank of England staff. One can infer that the Governor and his colleagues were initially prepared to let Northern Rock go into receivership and for its mortgage loans to be taken over by a stronger organisation. The depositors’ funds would be safeguarded, but there would have been many sleepless nights.

It would seem that the Bank of England is independent of the UK government when it is pursuing government policy. However, if it pursues policies which it deems in the interests of the UK economy, yet are contrary to short term political expediency, then this independence is an illusion.

By sending out a lifeboat, the Bank of England has become shipwrecked on Northern Rock.

Leslie Hardy is Chairman of Wellington Estates Ltd
a North Cyprus Property Company. Follow this link for more information on
Northern Rock