George Osborne recently declared Britain was 'open for business' but while Britain is no longer officially in recession, times will continue to be tough for many businesses.

Investments in areas such as recruitment, equipment and new premises have had to take a backseat and despite the improving economic situation it doesn't mean that things are going to get any easier overnight.

For some businesses then, support is available and there is growing opportunity for them to revisit their investment and capital expenditure plans.

So how can you ensure that your business is positioned to take advantage of growth opportunities over the next 12 months?

If you feel in need of some advice on how to move things forward then log onto this live webTV show where Colin Fyfe, the divisional director for Clydesdale and Yorkshire Banks will be offering his recommendations along with how their new Investment for Growth package could benefit you.

Colin Fyfe joins us live online on Friday 2nd July at 12.45 to discuss the future of British businesses

For more information visit www.cbonline.co.uk

Clydesdale Bank Webchat

H: Michael Wilson, host

A: Colin Fyfe, divisional director, Clydesdale and Yorkshire Banks

H: New research from Clydesdale and Yorkshire bank suggest that business confidence is on the up. In today's show we'll find out whether Britain's small and medium sized businesses have enough to deliver sustainable growth

Titles

H: Hello and welcome to the Business show, I'm Michael Wilson. Now despite George Osbourne's claim that Britain is open for business, trading conditions for the nation's SMEs are going to be tough for some time. However research undertaken by the Clydesdale and Yorkshire banks suggest there are encouraging signs to suggest that confidence is returning to business communities. Almost half of England and Scotland's businesses' managers believe their businesses will grow over the next 12 months. Well joining me to discuss this is Colin Fyfe, divisional director of Clydesdale and Yorkshire banks. We're also streaming live today so if you have any questions for Colin please use the box on your screen and we will do our best to tackle them over the course of the next 15 minutes or so. Now coming up on today's show, the emergency budgets' impact on business, whether it's making new capital investments or servicing existing loans, we also take a look at the measures taken by Clydesdale and Yorkshire banks to help British business. And all your questions answered. Let's talk about the budget first of all, I mean a lot of businesses have been making a lot – and you perhaps thought they would – about how complicated it was. What was your overall impression of what businesses thought about it?

A: Well it's a budget that's designed to try and raise funds but also to stimulate growth, and that's a really challenging couple of objectives to achieve. I think as yet we haven't quite seen the detail that's going to help us to – for us to encourage and help our business customers, help them navigate through this budget. Time will tell and there's some encouraging signs, there\\\\\\\'s some corporation tax help, but you know VAT going into 2011 it will be interesting to see how that impacts in business

H: Let's talk about corporation tax; you mentioned that I mean it's coming down isn't it over 4 years. Is that a significant reduction; is it enough to make Britain open for business?

A: Well I'm sure many businesses would say it's never enough, regardless of how far corporation tax could come down. It definitely helps and I think the most important thing for businesses today is to understand what the market opportunities are for them. They know better than anyone else what opportunities, what conditions they can thrive in, and you know we try and help the businesses to understand that and then make decisions about their own growth

H: What about VAT because that was a huge tax rise wasn't it, well expected, perhaps not as much as people expected, they were talking about 22% at one stage weren't they, but it was just to 20%. At the same time you have to worry about what effect it will have on consumer spending and on business confidence in general I suppose. What do you think?

A: Yes I think for the rest of this year, 2010, and the first few days of 2011 we could be in for a bumper time for retailers. It may be that there's some spending ahead of 2011 that takes place, that's when VAT will start to bite. I guess it depends on the timing, like all the – the confidence is rising as we see from today's research. If that – if confidence continues to rise in 2010 we would hope that businesses will be able to ride through this VAT increase

H: How confident are you that that survey actually shows what's going on? Because surveys are notoriously difficult, people often say different kinds of things. Are you really that optimistic about business confidence?

A: Well they match a lot of the conversations that we're having with customers up and down the length and breadth of Britain, and there's a - I guess there's a wide range of views and optimism. There are sectors where – they are prime opportunity to grow over the next 12 months. We saw IT and telecom, we saw travel and transport, we actually saw manufacturing as one of the key three sectors who believe that growth will happen in 12 months' time. Now across Great Britain there's a lot of businesses that are identifying that market opportunity. Asset prices have fallen, there are some good people available for recruitment, so now's the time for a lot of those businesses to perhaps put a step forward, be proactive and take advantage of those opportunities

H: What about the rise in National Insurance, because that is a payroll tax, whichever way you look at it isn't it?

A: Well the rise in national Insurance has probably the widest impact across many taxes, and I mean National Insurance is one which I guess we'd all hope was held at a fairly prudent and low level. That will have an impact but I still believe that based on the research we had 48% of businesses across Great Britain believed it was now the right time to start recruiting again, in the next 12 months they would be recruiting

H: Colin Fyfe, for the moment thanks very much indeed, you're watching the Business Show with me, Michael Wilson. Coming up next, how the banks can actually help businesses

Break

H: Now if you've just joined us on the Business Show I'm joined today by Colin Fyfe from Clydesdale and Yorkshire Banks. Specifically how are you actually helping businesses, because there's been a big criticism about banks not lending enough and so on, credit squeeze. Is this – is this something you're familiar with?

A: Yes I'm very familiar with it, and I guess I can only talk for Clydesdale and Yorkshire. In October last year we pledged £10 billion worth of new lending over the next two years. That's on the back of the fact that we have never been closed. We've been open for business over the last two years and lending into local markets, and I think that's one of the key factors to stimulate the recovery in the British economy. Make sure that local businesses are being supported, when we take any deposits we make sure that they're reinvested by lending into local businesses

H: You've also said about the £10 billion haven't you over the next couple of years haven't you – I mean how's that spilling into the business community?

A: Well it's tracking very well and what we did in May was we introduced a package called Investing for Growth because it's important that businesses not only have access to the funds but they also have access to advice. We see opportunities and we also see risks, so if we sit down with a business owner whose looking through their business plan – is it the right time to buy premises, recruit new staff, new markets? We can help them to decide when and then we can structure finance that will free cash flow so they can take advantage of –

H: Let's talk about cash flow because that's vital isn't it, for every business, particularly small ones. How are you helping them?

A: Well cash is king. It is in the banking world, it is in every single sector, and there are many ways you can free up cash for the right opportunity, so taking capital repayment holidays on loans, restructure them over a longer term, interest only for periods and the moving on to sort of low start repayment profiles. That's the important thing for a business, to know their level of certainty, what their cash requirements are going to be, and make sure they've got enough available to recruit, to buy and to start expanding

H: And I mean how good are you about loans? I know that sounds rather a silly question but you obviously look at everything. People again, anecdotally say that banks are fairly fierce about that now, and also local bank managers have to refer their request up the line and all this kind of stuff, slowing down the whole process. Are you conscious of that as well?

A: Very conscious of that and five years ago we took the decision to bring a local credit executives, you know sometimes known in the market as underwriters into our local centres. I was in – I was in Burnley yesterday and our credit executives took 19 businesses from the local Burnley market and ran them through a workshop for two hours, helping them to understand what's the criteria that we use when we're assessing a business plan, a business proposal. And then actually gave them a case study, and helped them to look at what were the key risks, the financials, and allowed them to make a decision, what was the thing to do, should we approve this loan, or should we not? Fortunately 66% said yes they would approve it and that was the right decision, so it's important that businesses understand and work in partnership with banks, so we're listening and understanding -

H: Do you understand enough about business, do your frontline staff understand enough about business?

A: We believe they do because that's the main part of their job. Spending time in business premises, that's where you understand, you use the factory line, you see the processes and the stock that's inside an actual line outside the back door. So that's where we position our people, so that they can go there and find out –

H: They know how to kick the ties basically?

A: They know how to kick the ties, yes. And that's important to give advice, because if we're comfortable with risks in our business, so should a business owner

H: Colin thanks very much indeed. Now coming up next, your questions answered live

Break

H: Now we have some questions here and here's the first one from James Colin and this is from Marketing Donut. It says "should small business diligently spend their way out of recession or rein in and cut back?"

A: Well there's been a lot of prudent activity over the last couple of years and I wouldn't discourage that. Prudence has been key for businesses navigating successfully through the last couple of years. I think it's' now time to just start loosening those purse strings. There's some great asset values in the market, there's a chance to recruit people, some supported by government measures. I think – I think it's time to start being more proactive, more optimistic but you know I would –

H: You've got to be quite brave to do that haven't you?

A: I would take it slowly. Businesses know their own market conditions better than anyone else. Quite a lot of them have been through this before. Maybe not as extreme but they've been through it. They all know the signs and if they start to see the right signs for them, they start to be a little bit more optimistic

H: Ok. Here's Laura Finnigan. "Given that interest rates look set to be held at historically low levels, why the disparity and unfair margins which the banks are lending at?"

A: well it's a good question. Bank of England base rate has been low for some time and I think we all hope that continues to support the growth of the economy. The interbank funding rates have not been as low, and banks –

H: Let's be clear about that, that's the rate at which banks lend to each other?

A: That's the rate banks lend to each other and they've not been as low and therefore that is where banks get their money to pass onto customers, so between that rate and also the deposit rates which have lassos been steadily increasing, that's the bank's raw material. So raw material prices have been increasing. That's come a little bit more into line in 2010, but as we look forward you know there's a suggestion that the spread between Bank of England and also the rate that banks lend at may start to increase again so it's one I think we're all conscious of. We need to make sure as banks that we have got the right funding package in place, because the term, the capital holidays can also play a significant part in making sure that cash is available.

H: Ok we've got one here from Steve Hart. "Will we see an increase in the bank's lending to SMEs-sized entrepreneurs at favourable rates?" I.e. I think what he means is will there be more favourable rates for small businesses?

A: Yes there is, as we've talked about Investing for Growth which was launched by Clydesdale and Yorkshire, that is the crux of what it is trying to achieve. There is balance sheet availability on the table that we want to lend and therefore we're very keen to make sure businesses talk to us. We price for risk and any business who's talking to us who's very clear on how they're mitigating their risks as they navigate through this recession, that's how we start to get more comfortable and there's a good agreement on price.

H: Ok. Here's one from James Samson, "has the chancellor gone far enough in creating an environment for UK business to grow?"

A: Well that's the $6 million question because some of the measures that have just been announced they haven't really bitten in and – where corporation tax is one measure, I guess, you know I'm hoping that we'll see others that will stimulate growths in certain parts of the country. We also need to get people back into work; we also need to ensure that entrepreneurs have the optimism to start putting their toe into markets hat they've avoided for the last two years. So I think time will tell and we'll know more of that in the Autumn when we can see if bites start to take place

H: Colin Fyfe thanks very much indeed for joining us. That's it from the Business show this time. If you'd like further advice and solutions for business please visit cbonline.co.uk. See you next time