You might have heard about a banking stress test. Basically, this is a process that is undertaken which looks at the resilience of the Bank to ensure they can cope with any severe economic scenarios. In the banking world there are 2 types of stress test:
- The Bank of England runs an annual stress test for the largest UK banks and building societies.
- Any firms not part of the Bank of England test must carry out their own stress testing, often they will be encouraged to follow the guides specified by the Prudential Regulation Authority (PRA)
If we put this into a business concept a stress test can be vitally important for ensuring that a business is running to the best of its ability and has everything in place to ensure a successful future.
Narrowing this down further we can explore the benefits of a business funding stress test. When a business is looking to expand, grow or diversify and is considering the best financial options available, a stress test would be incredibly important. You challenge your business; you explore what could go wrong (internally and externally), what contingency plans you need to adopt and your need to rely on others. Obviously, there is a lot of output from the stress testing and it is this information which allows you to make informed decisions for your business.
Financial stress testing can be time consuming and difficult. Many businesses will often seek expert advice and this is where the NGI team can help. We know the importance of growth plans; we know the importance of business funding and we know the importance of ensuring a business is resilient and can adapt to testing situations. Our team can work with you to complete the necessary stress testing, evaluate the best options to fulfil your business growth plans and are then on hand to support you with your ongoing journey.
If you would like to know more about the benefits of stress testing please call us on 01993 706403 or e-mail email@example.com.