Charge your glass for the economic recovery

Economic forecasts are beginning to show some signs of optimism at a national level, but the reality for most businesses in the pub industry is that 2009/10 will continue to be a challenging year.

In the current environment, many businesses are understandably asking the question "how can we get access to money?"

The UK leisure industry is one sector that has felt the force of the current downturn, yet even within this industry, well-managed companies with a focused business strategy are still able to develop their business and embrace new opportunities.

The reality is that banks are keen to talk to and support businesses in the sector in tough times as well as good.

Everards, the Leicestershire-based brewery, is a good example of a company committed to its continued growth and expansion throughout the economic cycle.

Established in 1849, Everards is a family-run company with an estate comprising more than 160 pubs that vary from city-centre venues to community locals and village inns. And all of the pubs are within a 70-mile radius of the brewery in Narborough.

Towards the end of last year, during the height of the credit crisis, Everards decided it was time to review its banking requirements. The company was seeking a multi-million pound pub acquisition and refinance package.

Lloyds TSB's locally-based Corporate Markets team worked in partnership with Everards' senior management team to agree a competitive financial solution that matched the company's requirements.

It is good to see a business such as Everards thriving in difficult times and if we are to move from a recession to recovery, it is essential that such forward-thinking, well-managed businesses are still able to obtain the funding they require.

What we're looking for

So what do banks look for in a business when it requires funding - both in good times and bad?

Firstly, banks are looking for well-run businesses with a clear strategic direction. Before committing to lending, banks seek to understand their customers' business strategy and plans.

Banks want to take time to get to know the management team, learn about the business and develop a real understanding of what a company is trying to achieve and how it intends to get there.

As a result, they can offer the best financial package.

Secondly, both the bank and the businesses need to develop - and maintain - a close working relationship. It sounds simple, but it is essential that companies communicate with their banks regularly, and this becomes even more important in challenging times.

It is important for banks to understand important issues and challenges facing their customers so that they can support businesses as trusted partners in the tough times too.

Thirdly, businesses that demonstrate a prudent management of costs and working capital are likely to succeed.

As well as knowing that companies have a good understanding of their working capital position and cost structure, banks are keen to see that management teams are able to take considered but decisive action.

Finally, the attitude and the skills of the management team are all-important.

Management should have a breadth and depth of experience with clearly defined responsibilities. This extends to the important role of the non-executive directors in challenging the board's decisions. What's more, good leaders learn from their experiences.

It's no surprise that those companies led by management teams who have survived previous downturns are the best prepared for these current times. These are likely to be the people and businesses who will lead the UK's leisure industry out of the recession.

Andy Corbett is area director and head of corporate markets - East Midlands, Lloyds TSB​