By Rob Warlow
When it comes to dealing with banks the last few years have been tough on the relationships built up during the ‘boom’ period. The times when money was liberally handed out and your Bank Manager was a friend to your business are now a long and distant memory.
A recent survey from the insolvency industry’s trade body R3 revealed that 24% of the businesses surveyed felt strongly that banks are not supportive to their needs. To have a quarter of business owners saying that their bank is not behind them is concerning.
But with an economic recovery starting to take shape both sides need to start thinking about repairing the damage done to the relationship. If this link is not re-built any economic recovery will quickly flounder.
So who’s going to make the first move? Will you? Are you ready to invest time and energy if the outcome is a workable and profitable relationship? And yes, before you say it, the bank’s appetite for doing business is still limited — I see this every day in the dealings I have with my clients, but the process has to start somewhere.
If you’re ready to go for it here are some ideas on how to get the relationship back on track.
What’s Done Is Done
The first step is to draw a line under what’s happened. In any meeting or correspondence don’t go over old ground, no one wins. It is tough to forgive and forget but perhaps there were some rash decisions made by you? If you had a part to play here then now is the time to play the honesty card; hold your hand up, and admit the mistakes. Who knows, perhaps the bank may join in!
Change the Way You Communicate
Trading insults is not going to get you very far. In a past life I sat in the Bank Manager’s chair and the moment any conversation took at turn for the worst they lost my support — human nature I guess. If you have a naturally aggressive communication style remember the old saying, ‘people do business with people they like’. Don’t expect your Manager to support you if there’s no mutual respect or understanding.
The same goes the other way though; if your Manager treats you this way, get your concerns out in the open before going any further.
Communication is also about information flows. Banks thrive on information; decisions are based upon what they know about your business. In preparing the ground for a new way forward agree to send in a quarterly or monthly update on what is happening in your business. The briefing document should include your latest Management Accounts and a commentary sharing the good news and the bad news.The more information the bank has the better informed they are.
Become a Better Listener
The inability to actively listen to what is being said can be the root cause of many relationship problems. There are times where you are so convinced by the potential in your plans that you don’t truly listen to the questions or concerns being posed. You may benefit from additional insight in to your plans if you only learn to actively listen. You need to know what the bank is thinking from the outset so you can correct any misunderstandings. Discovering that either one of you missed a crucial point because neither was actively listening is a waste of valuable time.
Walk in His Shoes
The root cause of many arguments is simply a lack of understanding. As part of the bridge-building process you need to take time to understand the new rules your manager is playing under.
Understand the constraints your Manager is working under; be aware of the guidelines and the crazy rules he has to operate by. Once you understand the ground rules you’ll realise there are some things that you can’t change so eliminating future relationship flash points.
A common frustration is that very few Managers have the discretion to say ‘yes’ without referring to a higher authority. You will have no opportunity to speak to the person who’s presented a list of twenty five questions so there’s no point in taking it out on your Manager. I deal with bankers all the time and many are just as frustrated as you are.
Learn To Be Patient!
If you start out with the expectation that you will you get an answer to your request in two weeks ... forget it. Whilst banks are beginning to wake up from their lending hibernation the appetite for deals is still poor and they need convincing.
If you are going to survive this ordeal you are going to need a large measure of patience. Expect the endless tiresome questions; expect the weeks of silence and expect a long and detailed terms and conditions letter.
In my experience don’t be surprised if you are still talking three to four months into the process.
So with that in mind your planning has to be spot on. There’s no point exacerbating your blood pressure problem when, with careful planning, you could have foreseen your current cash flow process. Expecting a bank to solve your problem tomorrow is unlikely to happen; it doesn’t work like that anymore.
And Finally ... Call It Quits It You Really Can’t Make it Work
As with all relationships, sometimes the damage done by past events is just too deep, and it’s better to go separate ways. Mutual distrust can be so ingrained that its better you go and look for a new bank instead of wasting valuable time.
So there are some ideas to get the relationship with your bank back on track. Is it going to be easy? No. You will still hear stories of some strange decisions being made by banks but the process of healing has to start somewhere and why not with you?
About The Author
Rob Warlow helps business owner’s deal with their banks to obtain funding or to assist in re-building damaged client-banker relationships. He is the author of ‘Loan Sharp: Get the Business Finance You Deserve’ which is available on Amazon and a self-help guide on dealing with banks. Visit his website for more information www.businessloanservices.co.uk