A thought on "local" banking for local businesses

On the drive back to Greenwich this evening, I was listening to a programme on Radio 4 (it happens occasionally when I fancy a change from Pendulum and Feeder) about how you might go about setting up your own bank. It raised a number of interesting challenges and ideas about conventional (and unconventional) banking and the ways in which various bright sparks have reacted to the banking crisis.

I shan't discuss the full ins and outs of it, but one item that cropped up was Essex County Council's scheme to offer temporary support to local small businesses (in conjunction with Santander) in the form of overdraft facilities and loans. The representative from the council explained that local businesses needed cash to support themselves through the recession, the council had a considerable amount of cash raised through day to day business and that safeguarding local businesses was a priority (I guess their logic goes something along the lines of "less business=fewer jobs= fewer employees= less revenue for us"), so the idea of creating access to cash where normal banks were unwilling was put into action.

It sounded like a simple and effective way of ensuring that small, strong local businesses stay open through the recession. 87% of Greenwich's businesses employ fewer than 10 people, so you would assume that helping these small local enterprises would be a priority for the council to ensure that local businesses can survive until the recession is over.

On the contrary, a quick visit to the Greenwich Council Business page greets me with the headline: "Planning for emergencies: Is your workplace ready for an emergency? Find out how planning could help minimise the risk of disruption." Within this article is a great number of noble words on how to draw up strategies for your business should civil disorder or those pesky terrorists get in the way of trading in the normal way, but unfortunately it doesn't have any guidance on what to do if you wake up one morning and find your customers have gone. Or if your bank is sending you vaguely threatening correspondence demanding all of its money back in full within a short period of time. (Or, oddly enough, what to do if your workforce is struck down with pandemic flu).

Having said that, it seems that an action plan "concentrating on the "must do" rather than "nice to do" activities of your business" may help avert you from catastrophe. But ONLY if you test your plan, as it sagely notes that "An untested emergency plan is A RECIPE FOR DISASTER!!!" (...I might have taken some artistic licence with the caps).

I think the point that I'm attempting to make with this gentle ribbing is that is likely to take more than doling out common sense to reduce the risk of business failure when times are hard. It takes swift and decisive action and a commitment to ensuring that all available action can be taken to try and encourage small businesses to flourish. I hope that if I ever get the chance offer that assistance on the council that I am able to offer more than just words.