Getting finance from your bank

Dealing with your bank manager

I deal with the Bank's every day and its clear there is a huge difference in what they say in the media and what they do.

They keep banging the drum that they are open for business and they have money to lend. But do they want to lend? Yes they do but you now have to work at getting the funding.

I see three main issues with the lenders:

1.Managers who don't understand business-most of the experience has gone.

2.Faceless underwriters who are scared in putting their name on a "YES-we will agree this one".

3.They don't have as much money as they use to so the quality line has gone up.

On the positive side, it is getting better and more lenders are entering the market and rates are coming down.

To maximise your chances of getting the funding:

1.Keep them informed on a regular basis-they don't like surprises.

2.Treat them as a shareholder.

3.Tell them about your future plans and not just the past.

4.Draw up a business plan. It can be just 1 page.

5.Show them numbers-they like numbers. As well as your last annual accounts show them current figures as well.

6.Advise them in advance of any cash flow issues. You are more likely to get it paid.

7.Get help if needed from your accountant or finance consultant

8.Find out how your manager is targeted-see how you can help them.

If your manager doesn't understand your business then ask for a new manager or move your account.

The right type of finance

Buying assets for your business such as a car or equipment needs to be done on a loan or asset finance.Don't tie up valuable working capital.

If the bank has your house as security and a personal guarantee for your business overdraft then consider invoice finance.Not for every business but can be more flexible.

Don't have "all your eggs in one basket".Spread your finance around.