By Guy Rigby, Head Of Entrepreneurs At Smith & Williamson

As we all know, persuading a bank to give you funding is a much trickier business than it used to be. So if you’re an entrepreneur or growing company relying on bank finance, it’s essential to foster a healthy relationship.

Here are five key steps that will help to inspire your bank’s confidence and help you reach a successful conclusion.

1. Be professional

Plan ahead for meetings. Presentations should be detailed, accurate and realistic, showing an appreciation of the risks and how these can be mitigated. Always adopt a professional approach to seeking or renewing your debt facilities. Make sure that you are offering adequate security.

2. Build trust

Banking relationships are built on trust. Keep in touch and keep your bank informed at all times, not just when you need their help. Focus on the positive, while being open and transparent and alerting them to potential threats.

3. Be practical

Take care not to breach your banking covenants and deliver financial information and other documentation in a timely manner. Remember that perceptions are generally regarded as reality, so don't create bad ones! Be proactive with business updates. Voluntarily provide regular copies of business plans, financial projections and reports before you are asked.

4. Show quality

The quality of your financial information is paramount. Provide reliable information and supporting numbers which are comparable over different time periods. Poor or insufficient evidence of your financial position and prospects may lead to your bank assuming the worst.

5. Be prepared

Make sure you understand who and what you are dealing with. Banks are protecting their weakened balance sheets and adopting tighter lending criteria, so be sensible with your requests and understand that margins and fees have increased. 

Smith & Williamson’s corporate finance and debt advisory teams can help you source the funding you need. For further information, contact Guy Rigby, Head of Entrepreneurs at Smith & Williamson on 020 7131 8213 or email guy.rigby@smith.williamson.co.uk

By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.

Smith & Williamson LLP
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International

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