< PreviousNeither a borrower nora lender beBy John Harlow, director, Harlow InsolvencyPolonius:Neither a borrower nor a lender be,For loan oft loses both itself and friend,And borrowing dulls the edge of husbandry.Hamlet Act 1, scene 3, 75–77When all usual sources of finance have been exhausted, people will often turn to family and friendsfor assistance. It is only natural and is, after all, probably safer than turning to a loan shark or evensome so called pay-day lenders. The interest charged by some of the latter may often render theoriginal loan practically impossible to repay.Close family and friends will often lend without charging interest and more often than not,won’t protect themselves with any written agreement, repayment schedule or security,relying instead on trust.Without this sort of relationship, the world would be a sadder place, but relianceon trust alone is fraught with danger. Failure to repay can lead to family feudswhich are far more stressful and far reaching than normal debtor/creditor disputes.Money issues can cause rifts in family relationships lasting generations.This essential trust inherent in family relationships and expected within closefriendships is what causes the most difficulty if, for whatever reason, thedebtor finds himself/herself unable to repay the loan.As an Insolvency Practitioner (IP), I see these issues arise frequently. Inan extreme case, the creditor may of course prove in the debtor’sbankruptcy, although where the relationship is that of a spouse or civilpartner, any credit provided to the bankrupt spouse/civil partner willrank behind all other categories of debt. Problems sometimes arise where a debtor who is facing formalinsolvency decides to repay his friend or family member ahead ofother creditors. If the debtor has a Bankruptcy Order made againsthim, the law may presume that this repayment was influenced by adesire to prefer that person and the court may require thatcreditor to repay that money to the Trustee in Bankruptcy. If afriend or family member had lent money to a company, whichthen goes into insolvent liquidation, then the same rules applywhere there has been a repayment to a connected party. In all cases, the creditor is required to present a proof of debt tothe IP before receiving any distribution from the estate. This can beproblematic where there is no written or documentary proof tocorroborate the claim and may lead to an otherwise valid claim beingrejected for lack of evidence.For this reason, it is important that any lending between friends andfamily should be evidenced in writing, preferably with some form ofagreed repayment schedule. In certain cases the lender may ask for someform of security over the loan to protect their position. It may feel like a lackof trust by a lender to ask for such at the outset, but it can obviate a lot ofproblems in the future if for any reason the borrower ends up in financialdifficulty. FINANCEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 20FINANCEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 21competitive with a range of fundersoffering the product. Not only are wefinding that Allied Irish Bank (GB) are ableto compete, we also have an edge on thecompetition by being able to deliver onservice and offering a bankingrelationship that will sit comfortably withyour current banking arrangements. Weare always on hand to offer a secondopinion and advice to our customerswithout being intrusive on their crucialbusiness decisions. This was key to uswinning the 2014 and 2015 BusinessMoneyfacts Awards for ‘Best Servicefrom a Business Bank’.This would be endorsed by ChrisHughes from SEF Ltd who says: “Ronanand the team in Nottingham have beenvery supportive of me and my businesswhich has allowed me to unlock mycompany’s potential and enter into newprojects safe in the knowledge that I havetheir backing.”We have certainly seen an increase inthe amount of HP agreements beingwritten which we put down to not only animproving UK economy, but also theCapital Allowance scheme which allows abusiness to deduct some or all of thevalue of the item being financed fromprofits before paying tax. On this point, Iwould recommend speaking to yourAccountant or Tax Advisor for moreinformation or by visitingwww.gov.uk/capital-allowancesAllied Irish Bank (GB) is a specialistbusiness bank in the UK with AssetFinance being one of the key products onoffer to new and existing clients. More information and advice aboutthe services we offer to OwnerManaged Businesses can be obtainedfrom either me or my colleagues inour Nottingham office on (0115)9082460. Alternatively, you can go tobusiness.aibgb.co.uk orbusiness.aibgb.co.uk/owner-managed-outlookDirectly after the crisis, like manyestablished Banks, we were very quiet inthe area of Asset Finance. However,since the end of 2011 when we returnedto the market, we have been proudlysupporting Owner Managed Businessesboth locally in the East Midlands andthroughout Great Britain by offering HPfunding. This has seen our portfoliodouble over the last two years andbusiness volumes increase by 70% duringthe last year.HP is one of the most common andeasiest forms for funding CapitalExpenditure and it is why we have beenproviding this type of finance for over 40years. It is the simple method by whichwe, as a bank, will provide funding of upto 90% of the net price, over an agreedterm, for the purchase of a particular assetfor use within your business and at theend of the agreement the ownership ofthe asset transfers to the business. The Asset Finance market is veryUnlock yourcompany’spotentialRubber ducks, dumper trucks, access platforms and tractorunits may sound like the birthday wish list for a six-year oldboy but it is actually a few of the plant and machinery itemsthat have been funded through Hire Purchase (HP) over thelast few years, says Ronan Mitchell of Allied Irish Bank (GB)Asset Finance.FINANCEEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk22Is time running outfor letters of credit?For as long as international trade has existed there havebeen concerns from exporters or sellers about releasinggoods or providing services before they have been fullypaid. At the same time from the buyer’s viewpoint, thereare concerns about paying before receipt.Since the days of ancient Egypt, traders have offeredeach other formal promises to pay, in advance of thepayment itself – letters of credit. The process has evolvedand become part-automated but the same principles existtoday. A modern documentary letter of credit is a guaranteeof payment made by the buyer’s bank to the exporter,subject to certain conditions such as delivery on time andto the specified standards. The idea is that a promise to payfrom a bank is worth more than a promise from the buyerthemselves.High street banks and UK Export Finance (UKEF) willoften encourage exporters to request a letter of credit fromthe buyer’s bank because it reduces the risk of non-payment. If the exporter is concerned about the reliability ofan overseas issuing bank, the exporter’s own bank may beable to address this concern by “confirming” the letter(adding its own undertaking to pay, after checking thecreditworthiness of the overseas bank).So why has there been a gradual decline in the use ofletters of credit in recent years? What might be theproblem with using them?There are several reasons for the decline. One iseconomic: as markets recover from the banking crisis, firmsand banks may feel less need to cover the risks of trade.Also, some buyers do not like to provide letters of creditbecause they are contingent liabilities and can tie up creditfacilities with their bank. The importer and exporter bothincur bank fees. And exporters, particularly in the UK, maynot like to ask buyers for letters of credit as it might be seenas insulting, showing a lack of trust. This could potentiallydestroy the long and careful process of personalrelationship-building that it took to win the order in the firstplace.For businesses with limited export experience, theprocess of obtaining import or export letters of credit canseem onerous and daunting. What is more, while they arealmost always completed eventually, a large proportion ofletters of credit presentations fail the first time around. Thismeans the exporter’s funds may be held up, while anyproblems are sorted out. Reasons for such failure caninclude late shipment, resulting in late availability ofshipping documents; or the exporter’s failure to present allof the other documents required by the letter of credit in therequired form or by the required time.In the wake of such problems, last year saw a 36%reduction in the use of letters of credit worldwide. At thesame time, an increase has been seen in open accounttrading, and a 10% rise in the use of other methods toensure payment such as digital initiatives designed to offersimilar comfort without the hassle of the paper, such as theBank Payment Obligation.So as an exporter, should you still consider usingletters of credit?The short answer is yes, though a careful risk calculationneeds to be made. Increasingly, UK exporters are lookingbeyond the UK’s main traditional trading partners of the EUmember states and the US, towards emerging markets inAfrica, South America and Asia. These markets presentgreat opportunities, but there is often less chance ofrecovery or litigation following non-payment.As such when considering letters of credit, the cost ofusing them should be compared to the risks of not usingthem, depending on the markets you serve. Ultimately youwill have to decide, if you are trading on open account andwithout export insurance – how much can you afford tolose? You will also need to take advice on how to maximiseyour chances of having your documents accepted on firstpresentation. If you are unsure of the best way to proceedor where to seek advice, please ask your UKEF ExportFinance Adviser, your bank manager or your local Chamberof Commerce.Hot on the heels of Export Week, UK Export Finance’s exportfinance adviser Johanna McSweeney explains how East Midlandsbusinesses wanting to export in emerging markets should considerthe value in using letters of credit to help secure funding.FINANCEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 23SHUTTERSTOCK.COM/SUPHAKIT73NETWORKINGIt has been interesting and encouragingto see so many firms happy to send morejunior staff to this event because often,business development is seen as a nichearea for a few key partners or assigned toa specific person alone.In my role, I work with marketing andbusiness development teams every dayand whilst I think it is essential for anyprofessional firm to have a dedicatedperson in that role it should not stop there.Whatever grand marketing schemes canbe conjured up, people still deal withpeople. That means ensuring that allemployees understand business objectivesand crucially, how to communicate them.This is especially the case with youngerteam members who should beencouraged and recognised in terms ofthe part they have to play. Many form tightbonds within their peer groups and theseare crucial as careers develop. Imagine thepower firms have within their teams toamplify their messages and opportunitiesthrough the enthusiasm of their youngercolleagues.Business development training shouldnot be the preserve of a chosen few –everyone has a role to play.The seminar heared from Adrian Peck,a Trainer and Master Practitioner ofNeuro-Linguistic Programming (NLP), aSports Hypnotist, Clinical Hypnotherapistand Certified Business Coach. Adrian hasworked with elite sports people acrossthe UK, including World and Olympicmedalists to empower them to overcomeperformance anxiety, deal with nervesand ultimately to win.Business development- a skill all professionalsmust develop Last month, Nottingham Professional Services (NPS) a group that Greg Simpson of Press forAttention has helped to establish in Nottingham, is hosted an event aimed at ensuring thatbusiness professionals get the most out of their contacts.East Midlands Business Link www.eastmidlandsbusinesslink.co.uk24ROUND TABLEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 25A recent report from the Higher Education Careers ServiceUnit (Hecsu) showed that the East Midlands has the lowestretention of students of any UK region, with 39.2 per cent ofthose who studied in the region in employment there sixmonths after graduation.Our latest round table discussion, sponsored by FreethsInitiate Nottingham examined how this brain drain affects thegrowth and competitiveness of East Midlands businesses, andwhat more can be done to retain the best talent in the region.Why does the East Midlands havethe lowest rates of retention ofstudents of any UK region?Emma Medina: I think if we look atNottingham, then it has a very highstudent population, and so it’s onlynatural that if a lot of students come toNottingham, then higher numbers willleave. I think the problem is that thereisn’t a very cohesive offering forNottingham. Young professionals don’twant to stay here – they need to knowwhat Nottingham has to offer, and we’renot very good at telling them that.Mark Thomas: The East Midlandsdoesn’t have an identity – at least not acohesive one. It seems to be a transitpoint before people move on elsewhere.Panel: Lizzi Holman, NottinghamCity CouncilMark Thomas, SygnatureDrug Discovery Jack Shreyhane,Walgreens Boots AllianceWill Rossiter, NottinghamTrent UniversitySimon Lydon, HaysAlan Coole , EMPAEmma Medina FreethsInitiate NottinghamFiona Powell, FreethsInitiate NottinghamIan Mackinley, GleedsMark Goldby, SMSElectronicsThe brain drainROUND TABLEEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk26We have three cities competing against each other, andthat needs to stop.Alan Coole: We see places like Manchester buzzing,bringing everyone together, as it looks to grab moredevolved powers and all the money and funding that willbring with it. Unless the three major cities in the EastMidlands do the same, then we’ll never be able to havethat. Birmingham is a major attraction, and along with thewider Black Country it’s starting to pull together. We’ve lostthat identity. Whether you liked Emda or not, at least it gavethe region some sense of identity.Ian Mackinley: If we look at the University of Nottingham,then they target a lot of overseas students – and they’renever going to stick around in the city when they’vefinished their courses. They’re never all going to come andwork here.Lizzie Holman: It’s become apparent to me that studentsaren’t aware of the great job opportunities in the region.They want to work for a company who will be able toprogress their career, but sometimes it’s hard for SMEs toget the message across that they can provide this.Will Rossiter: I think we’re mis-specifying the problem.There are only two regions in the country that aren’t netexporters of graduates – London and the south-east. It’s adeep-seated trend. The East Midlands is under-representedas far as managerial and professional jobs are concerned,and so the average earnings are lower. There simply isn’t asmuch graduate employment in the region.Medina: I came to Nottingham to university, and I’vestayed. However, I think young professionals drift awayfrom Nottingham as there’s no ‘scene’ for them to gettogether and network. Over the recession there becamefewer and fewer opportunities for them to get together andmix, so they’ll leave and go to London.Fiona Powell: I fall into that category; I graduated inNottingham and applied to jobs all over the country, andwent to London. However, I think a lot of London firmswould love to have clients in the East Midlands. There aresome great businesses to work with up here.Mark Goldby: Derby seems to have greater retention ofgraduates; what’s it doing that Nottingham isn’t?Thomas: I think Derby historically has done morevocational courses.Rossiter: I agree – it has a reputation of being much moreof a local university. Nottingham University is much moreinternational, and Trent University sits somewhere betweenthose two – they’re very complimentary. Across the EastMidlands we have the full range of institutions, and they allfulfil different roles.Do businesses actively go looking for graduates?Goldby: We employ 200 people, and ten per cent of thoseare graduates. Engineers usually stay nearer home.However, we find the competition for the best talent verytough. Derby, for example, has a strong manufacturing andtechnology base, and we struggle to keep our best peopleaway from that. All Rolls-Royce has to do is click its fingersand they’re gone. We’re engaging with the academies andstudio schools to highlight the world of work, and to makesure they know that engineering can be a highly lucrativecareer, and that’s it not all about men in grimy overalls.Coole: The property industry went through five years ofhell. That was my fourth of fifth recession, and mostcompanies stopped training, and so it was very hard to gointo schools and tell young people that they wouldadvance in the world of construction. Unless we tellstudents about the broader opportunities available in thesector, then it’s going to be very hard to attract graduates.Jack Shreyhane: We’ve noticed that massively. We’vegot to tell graduates that working for Boots isn’t aboutstacking shelves. However, 16-21 year olds don’t followtrends, they set them and if we don’t get in with them earlyenough then we get left behind.Mackinley: Gleeds employs over 200 people, and we’vebeen taken people from Nottingham Trent University tomeet client demand. What we can offer them is anoverview of our international offices and the potential to goand work abroad, which can be very attractive to them.Sheryhane: I moved to Nottingham with my family threeand a half years ago, and we now see ourselves as a Nottingham family.There’s such a strong cultural heritage in the area, but I’m not sure everyoneelse from around the UK knows this. It’s all about the brand of the EastMidlands. We can’t compete with London, but we should be proud of theregion, and get our collective voices together.Holman: I think the problem is that we don’t really have any business rolemodels in the East Midlands. However, the region is incredibly well connectedin terms of transport links. We have to ask ourselves: what do we put outthere as our offer?Thomas: The Chambers combining will help. As a company we attract talentfrom the likes of India and Japan and from across Europe, but they know littleabout the East Midlands.Medina: The three cities really do need to work together to make sure thatkind of incidence is put right.Holman: We’ve got to get through the student bubble and ensure that SMEscreate relationships with them so they will stay in the region. We also need toimprove the way that SMEs find students and make it more straightforward.ROUND TABLEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 27INFORMATION TECHNOLOGYEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk28Google – some mobile-friendly advice…results for users that are signed-in and have the appinstalled.So, if you don't have a mobile-friendly site, nowmight be the best time to invest in one. Googlestarted highlighting mobile-friendly sites last year -no doubt in preparation for their latestdevelopments.What do these changes mean in detail, then?Google says that when it comes to search onmobile devices, its users should get the mostrelevant and timely results, no matter if theinformation lives on mobile-friendly web pages orapps.As more people use mobile devices to access theinternet, Google says its algorithms have to adapt tothese usage patterns. Historically, when Google hasmade updates it was to ensure a site is configuredproperly and viewable on modern devices. Now, itsays it's made it easier for users to find mobile-friendly web pages and has introduced AppIndexing to surface useful content from apps.Now Google has expanded its use of mobile-friendliness as a ranking signal. This change willaffect mobile searches in all languages worldwideand will have a significant impact in our searchresults. Consequently, says Google, users will findit easier to get relevant, high quality searchresults that are optimised for their devices.Google statistics show that 48 per cent ofpeople who use mobile devices to access theinternet have a search engine as their startpage. With this in mind, it seems now morethan ever, is the time to power up themobile-friendliness of you website, andwhilst it is impossible to second guessGoogle's algorithms, it surely makessense to give your business a fightingchance - and boost your rankings.Take a while to think back 15 years to whenmobile phones first broke. Those huge slabs ofplastic where (rightly) seen as a technologicalbreakthrough that would - and have - changed ourlives completely. But what could you do with themapart from call your friends, and tell the time? Didanyone back then think you could buy things fromthe internet with them? Of course not...Fast forward a decade and a half, andeconsultancy's latest figures show that smartphoneusage has risen from 39 per cent in 2011, to 51 percent in 2012 and 61 per cent in 2013.Meanwhile, the proportion of mobile internetusers purchasing goods and services has increasedfrom 20 per cent to 24 per cent, 2013 to 2014.Meanwhile, Ofcom tells us that Google is themost popular search engine across the EU5countries, the US and Australia. Japan is the onlycountry where Google is in second place to Yahoo!SearchGoogle was the most popular search engineacross all of the comparator countries apart fromJapan. Google was most popular in the Europeancomparator countries; over 80 per cent of internetusers in each country visited the search engine inAugust 2014.Google likes to keep you guessing, of course.The big changes to Google's search algorithmshave been made, and if you have a mobile-friendlywebsite, then the search engine giant says thatyour ranking and surface app results will be muchhigher.The company says that the change will have a“significant impact” on all mobile searches in alllanguages worldwide, but as a result Google saysthat users will find higher quality results.Google will also start to use more informationfrom indexed apps as a factor when ranking searchby Roger Davies, AdvantaproGoogle – some mobile-friendly advice…INFORMATION TECHNOLOGYwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 29SHUTTERSTOCK.COM/MAXPRO Next >