Does it make sense that a small business pays into a bank a check for $10 that has come from another small business and it bounces through insufficient funds. The bank charges you $8. They try to present the check one more time and again it is returned and you get penalized another $8. This takes your account over drawn and you get a further penalty imposed on you of $25 for exceeding your limit, without permission. Small businesses are unwittingly supporting the banks profits to a massive degree!

The countless times I have had entrepreneurs ask me why their bank has given them an overdraft and then when times got tough they called it in, effectively collapsing their business. In other words they give you an umbrella and take it away when it rains! Banks have carrying out this type of cavalier activity for years and making inordinate profits in the process. Then they spend millions of those profits on expensive advertizing campaigns to attract new customers to their banks to counter the churn rate. They have totally ignored the customers they already have! If you or I treated our customers like the banks treat early-stage and start-up businesses you wouldn’t last a week! The above is just the tip of a billion dollar iceberg, but we haven’t got time to go into all the other way small business’s pay through the nose for a very expensive and lousy service.

 So what’s the solution? I thought you’d never ask! You need to alter your business model so that you can position your business so that you can use the banks and not be abused by them. Get out of the mentality of thinking about loans and overdrafts and think in terms of cash trading, increasing margins and massively boosting sales. Yes, you may have to entirely change the model, the business, or even industries. Go where the money is and make it yours. Try to get out of the banks clutches altogether, especially if you are an early-stage or start-up company. Never be tied to just one bank, get as many business accounts as you can. Use the banks only when you don’t need loans and overdrafts and if you are going to use bank money make sure you have massive excesses in terms of cash flow and profits so you can pay them back. Don’t give personal security, (there’s always another way, believe me) because as sure as night follows day it will get called in at the most inconvenient time.

 Learn from all the banks. They have locked onto a product where there is massive demand! They are constantly creating new angles and financial products. They change the rules of the games, so they win all the time – at your expense I hasted to add. Don’t get me wrong, I work with many banks and also have many more chasing me for business. They know that when I raise £1m to £10m equity funding for a client, that is the perfect time to come in with some bank finance.

 Spend less time and energy thinking and worrying about banks and start thinking in terms of a business model of your own – that works! Now is the perfect time to change boats (and banks for that matter!) and start paddling down the stream with the current in your favor. You’ve been paddling upstream for far too long! Believe me!

The Business Plan. This crucial document is the equivalent of a politician’s manifesto. Though unlike a political speech, your audience has to buy every word! Your business plan is your mission statement. It must also show potential backers precisely how and when the profits will be generated. Vague estimates will impress no-one – the business plan requires no-nonsense facts and figures – as well as the essential “wow factor”

Practice the Presentation. However brief your presentation to investors it has to be comprehensive, fluent and well put over. Indeed the less time you’ve got to sell your idea, the better your pitch must be. Role-play the whole thing several times with a friend or your partner, and get them to think up questions and objections. This way you can fine-tune both the content and delivery of what you’re going to say to the money people.

Ask the Family. Conventional wisdom states that business and friendship don’t mix and that borrowing start-up money from relatives and mates is a recipe for disaster. This can certainly happen if those concerned have unrealistic expectations. By all means look to friends and family if they genuinely want to invest in your business. But always ensure the business plan and proper contracts are drawn up just as with a bank loan.

Ask Your Customers. If you already have a business and want to expand or start something new, maybe some of your existing clients would be interested. You will not be a stranger from nowhere asking them for cash – you already have a commercial relationship.

Ask Teachers. Contact universities and colleges who have entrepreneurial centres offering start-up finance and support to new businesses. Keep your eye on publications like the Times Higher Educational Supplement and the Guardian weekly Education section for news of these kinds of scheme.

Ask about Micro-Loans. If you want a relatively small injection of capital but your credit record is inadequate, it can still be difficult to borrow. Micro-Loans focus on your character and management ability rather than anonymous credit scores. Micro-Loans are available from certain banks, government agencies and business groups. They can serve as a springboard to larger financing and help establish your track record.

Ask the Government. There are various departments, national and regional, designed to give a leg-up to new businesses. Often you’ll be asked to jump through various hoops (made of lots of red tape!) before the leg-up arrives. This puts some people off, and they go to the bank for a simpler, quicker, and more expensive, loan. But if you’ve the patience to tick the boxes and fill in the endless forms that government borrowing requires, you could get a better deal, even an interest-free loan or grant.

Ask the Angels. Traditionally these are the wealthy individuals who put money into show-business ventures, especially West-End musicals. Often it is a gamble and the Angels lost their shirts but get to rub shoulders with the stars. In whatever type of business the Angels will ask for a share of your profits (equity) and if offered cash for equity you must consider the terms carefully before signing. On the other hand Angels really can make your company fly.

Location, Location. If you’re prepared to set up shop, or factory or other business in an area deemed in need of enterprise, there can be some generous grants available to start-ups. The usual criterion is that you will provide employment, preferably to locals. Contacts who may advise you of current opportunities include the Department of Trade and Industry, the Small Business Service and your local Business Link.