Advice:10 ways to help you get bank funding

By , published on 29th November 2010

Getting funding from your bank is not nearly as straightforward as it used to be. If you are a growing business relying on bank finance, maintaining a positive relationship with your bank is more critical than ever.

Here are 10 ways to inspire confidence in your bank and help you get the finance you need.

  1. Invest time and energy in communication – Banks that fully understand your business are more likely to be able to assist in the event of need.
  2. Understand who and what you are dealing with – It’s not just your Bank Manager. In the current climate the credit underwriter is charged with protecting banks’ weakened balance sheets and is adopting tighter lending criteria.
  3. Focus on your key business issues, both positive and negative – A well thought out credit proposition addressing the issues which are critical to lenders is essential. It will help you negotiate better terms and pricing.
  4. Take advice – In the current climate there is no doubt that banks are comforted by the use of business advisers who can add credibility to your proposition.
  5. Be proactive with business updates – Voluntarily provide regular copies of business plans, financial projections and reports before you are asked.
  6. Maintain a ‘no-surprises’ policy – Build trust and keep your bank informed of any potential threats. Let the bank know of anticipated funding needs as early as possible. You need to arrange financing much earlier than previously to avoid experiencing your own ‘credit crunch’.
  7. Be professional – Make sure information is accurate and plan ahead carefully for any meetings, especially when seeking or renewing debt facilities. Your presentation should be realistic, show an appreciation of the risks and how they can be mitigated. Focus on the positive but recognise weaknesses and set out actions to address them.
  8. Be consistent – Provide reliable information and supporting numbers. Poor quality financial information will lead the banks to assume the worst.
  9. Take care not to breach covenants – You could incur covenant waiver fees if financial information is not delivered in good time.
  10. Be realistic – As banks are trying to rebuild their balance sheets they are looking to reduce exposure, increase margins and fees and tighten covenants. Be sure that the lending structure requested is sensible and consider whether your circumstances may warrant price increases or changes to historic terms and conditions

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Janette Whitney

About Janette Whitney

Janette Whitney is an award-winning business consultant, media columnist and award-winning business author. She specialises in business growth strategies and finance and formed her consultancy business after a highly successful career in banking. Janette’s expertise has won her both national and regional awards which include ‘Consultant of the year’ and ‘Business Book of the Year’ award (as co-author of ‘The Essential Business Guide’).

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