You'll never work alone

Expensive advertising campaigns by the big banks to woo the self- employed may be missing the target. Traditionally, some 70 per cent of starter businesses turn to their banks for finance but this year only 20 per cent are doing so, according to the Federation of Small Businesses. More are using their own money, whether from redundancy payments or savings.

The reason seems to be a lack of confidence following the poor image acquired by banks during the recession. Banks seemed too ready to close small businesses in short-term difficulties.

"A few years ago the relationship between small businesses and the banks had completely broken down. They were pulling the plug on businesses at a minute's notice. Recently, things have improved enormously, but there is still a long way to go and small businesses would probably prefer to have a separate bank for them," said Stephen Alambritis of the Federation of Small Businesses.

"The main problem now is that relationship banking seems to have gone out of the window. Small businesses are attached to a business centre or they are just a number and find it difficult linking into the traditional bank manager who would take a decision there and then. Decisions are not taken at a local level."

Small businesses are being charged dearly for borrowing at 4 or 5 per cent above base rate, compared to the 1 per cent above base rate paid by large companies. The position on bank charges has improved, however. There is now a month's notice before they are increased and two weeks' notice before the charges are deducted.

Shopping around is important as every bank has a small business package. Last week Barclays Bank launched Business Call, a telephone banking service for business customers. It is being offered to the bank's 200,000 customers who are sole traders. For details, ring 0800 900921.

Other sources of information and advice include:

The 90,000-strong Federation of Small Businesses can give advice and support. The primary role of FSB is to lobby ministers, civil servants and Brussels: the federation gives a weighty pre-Budget submission to the Chancellor every year. But there is a range of other services on offer, including a free 24-hour legal advice line. The FSB can help with court cases involving things such as VAT, tax and health and safety. There is an insurance package for members.

For a free Be Your Own Boss pack, write to the Federation of Small Businesses, 32 Orchard Road, Lytham St Annes, Lancashire, FY8 1NY (01253 720911). Average membership costs pounds 100 and depends on the number of employees. If you have no employees, the cost is pounds 80 a year.

Business Link is another good starting point. It can advise you about finance, innovation and technology and can put you in touch with Training and Enterprise Councils and other useful bodies. Business Link is a national network of local partnerships between the business community, local authorities, universities, banks and the Department of Trade and Industry. Phone 0345 567765.

Home Run is an organisation offering advice, help and a regular magazine specifically for people who work from home. You can get a free fact sheet, How To Get Started, by sending an A4-sized SAE to Home Run, Cribau Mill, Llanvair Discoed, near Chepstow, Gwent, NP6 6RD (phone 012191 641222). Other fact sheets are also available. Annual membership is pounds 72, but Independent on Sunday readers can get a 25 per cent discount. Quote reference IOS1905.

The Telecottage Association (TCA) has more than 2,000 members and about 140 computer and telecom resource centres, which provide places for self- employed people to work. The centres give training, business support and access to facilities. TCA also provides help and support to people who work from home. There is an advice line and a bi-monthly magazine. TCA also runs seminars and local groups. A new teleworking information handbook to be published next month will cost pounds 13.95 and is free to members. Membership costs pounds 29.50 a year.Phone 0800 616008.

The Guild of Disabled Homeworkers is a charity that aims to foster self-employment among disabled people who can work only from home. One of the main services is a shop that sells items such as clothes and pottery made by disabled people. For a free information pack write to Guild of Disabled Homeworkers, Market Street, Nailsworth, Gloucestershire, GL6 OBX (01453 835623). Membership is free.

Bookshops carry a range of books on self-employment, including The Which? Guide to Earning Money at Home published by the Consumers' Association (price pounds 9.99) and Lloyds Bank Small Business Guide published by Penguin (price pounds 16).