Editor’s note: This article was first published in July 2010: Alfredo Sáenz as Banco Santander’s CEO (he left the post in 2013), the bank’s first-half 2010 net profit of €4,445 million and the credit squeeze in Spain all describe that moment.
Business owners and new entrepreneurs keep complaining about the lack of credit for their projects. Financing a new business has become a very hard thing to pull off. Alfredo Sáenz, CEO of Banco Santander, explains bluntly where the problem lies.
To sum up Sáenz’s speech on why small and medium-sized businesses aren’t getting credit, he essentially said that banks aren’t lending because demand in Spain isn’t creditworthy. In his words (our translation):
“Let’s stop telling stories: credit isn’t growing because in Spain there is no serious, solvent demand.”
Banco Santander posted net profits of €4,445 million in the first half of this year, roughly the same as in the same period of 2009.
While banks have all but turned off the credit tap in Spain, Sáenz tells us that Santander is increasing lending in places such as Brazil, the United Kingdom and Latin America.
Still, he may have a point, since business plans drawn up in Spain with few or no ideas for expanding into emerging markets make for unprofitable projects.
As we’ve discussed in previous articles, whether you’re planning to open a small business or a large company, the business plan you present to a bank to get financing must be well put together and as professional as possible. Here’s how to structure a business plan:
Remember: a bank lends money to the person who can show they don’t need it.
Further reading
- How to run a small business in times of crisis
- 5 ways to grow your business
- Why new businesses fail
- Common mistakes Hispanic business owners make
Featured image: Banco Santander, CC BY-SA 3.0, via Wikimedia Commons.
