As your firm grows you need more capital to sustain it, which may mean having to be in debt to the bank for a time

You have the office, but need to make it usable without delay. Your to do list includes partitioning, decorating, carpet, furniture, telephone, IT, letter headings and associated printed stationery and of course the name plate.

Suppliers are tripping over themselves with offers at huge discounts. You decide to fit out two offices with floor to ceiling partitions for privacy, one being for yourself, with the remainder at shoulder height. A local company in administration provides you with the “best buy” .

You have carefully budgeted the process, but start to be kept awake at nights worrying that you may run short of money. It only takes a couple of major clients to be a few weeks overdue with paying fees and the till will be empty.

Whilst profits are good, you recall the words of wisdom which state that most companies who go out of business do so due to a lack of cash not profitability. An inflow of cash may ease the fevered brow. How much do you require and from what source?

The bank seems the best option. An appointment with the person responsible for loans is arranged. It seems the local friendly bank manager is a thing of the past and the people running things and making decisions are just names on a piece of paper. Organisations such banks, are stuffed with client relationship mangers, who seem nothing more than sign posts to the name of the person responsible for a particular service.

The bank is not interested in offering you overdraft facilities. However they suggest a fixed-term loan, which means you have to take a lump sum at the outset and repay it with interest, over a fixed period of years. They will also be looking for you to provide a personal guarantee. This is not a very attractive proposition as it puts you in debt and worse off than when you started the business over two years ago.

Unfortunately the better the business is doing, the more working capital it requires to enable fee earners to be paid and other costs to be met, often before fees earned are paid.

You need to give the matter some careful thought.