Turning a Corner – joint IFT and LSB report launched.
Coronavirus and the steps taken to combat it has impacted SMEs greatly. Many are now facing financial difficulties and will need the support of their banks and lenders to continue trading. It is therefore imperative that financial services firms understand how to best deliver this support and signpost to third parties when required.
With this in mind, the Institute for Turnaround (IFT) has partnered with the Lending Standards Board (LSB) on a report discussing the important role that turnaround plays in supporting firms in difficulty. By combining our joint experience as the UK’s leading membership organisation for turnaround experts and the primary self-regulatory body for the banking and lending industry, this report provides information and guidance to increase good outcomes in relation to the treatment of SME customers.
The report comprises two parts. The first is authored by the IFT and focuses on explaining what turnaround is and its benefits to both individual firms and the wider economy.
The second section, produced by the LSB, explains the importance of having established governance structures and processes for banks and other lenders in relation to signposting to turnaround.
Turnaround is the process of restoring a business’s long-term health and viability. That may involve freeing the firm from the effects of inefficiencies that are hampering its ability to thrive or rescuing it from outright distress. A turnaround professional can offer the insight and advice needed to help business owners identify why the business is struggling and what can be done to rectify it.
Successful turnaround means returning the business back to profitability and a position where it can continue to grow into the future. Without the input of turnaround at the right time, it is possible that a business in difficulty will continue to struggle, potentially until it is too late to put in place any measures to halt its decline. Because of this, it is vital that banks and lenders understand how to signpost to turnaround professionals when a business customer could benefit from their input.
The importance of signposting
Signposting business customers to turnaround specialists can play a crucial role in the support firms offer SMEs in financial difficulties. By signposting customers in the right way, there is a greater likelihood of customers reaching the support they need whilst there is still time to improve the business’s fortunes. There are also risks presented when it comes to signposting. Without proper governance, oversight, and training, it is possible that customers are either not signposted, are signposted inadequately, or are signposted in a way that creates risk for the firm and customer.
By considering the SME customer journey holistically, including the steps from difficulties to turnaround, firms can improve the overall service they offer their customers. Encouraging an environment where struggling businesses are supported and given the best possible chance of success not only benefits the customer but also the wider economy. By utilising the experience of the IFT and the LSB, this report looks at the whole process relating to turnaround in order to improve the end outcomes delivered on the first line.
To read the report please click the link below.