Back To Basics – Banking And Funding
There are a number of key areas where profits leak from a business. These common problems apply across a wide range of businesses to varying degrees. Key questions to ask are therefore…
A) Have you reviewed your current funding in the past 6 months?
- If you haven’t reviewed this in the last 6 months, then the chances are that you aren’t up to date with your options. New funders are continually entering the market & products available change on an almost daily basis as funders become more innovative with their product range
B) When was the last time you spoke with your Bank Manager?
- This is crucial to ensure that you maintain a great working relationship with your bank. Many Bank Managers now have exceptionally large portfolios of clients and simply no longer have the time to maintain a regular contact strategy. Be on the front foot & keep in contact at least every 6 months. Banks also now change their funding appetite by sector, product type & facility type regularly, so don’t assume that just because your Bank would have funded your request some months or years ago, that they will still be able to do this today.
C) Do you know who your Bank Manager is?
- At face value this can seem like a stupid question. However, all Banks have gone through some serious re-alignment of their customer portfolios over the past 5 years and continue to do so. If you haven’t had any borrowing needs over the past few years or have reasonably low levels of borrowing, it could well be that you now sit in a centrally managed portfolio with hundreds of other clients & in fact DO NOT have an appointed Bank Manager. This can prove challenging at best and make future funding harder to achieve than in the past.
D) What funding are you likely to need over the next 12 months?
- It’s always sensible to plan ahead for funding as the process is now far more elongated than in the past. Recent surveys have shown that the average time taken from the initial enquiry through to final draw down is on average 13 weeks. Of course the process can be quicker than this, however please remember that High Street Banks often don’t react well to short notice requests for funding and may be unable to assist in time.
E) Do you accept card payments in your business?
- Card payments are crucial to many businesses today and are on the increase across almost all sectors. Therefore, your card processing costs are generally on the increase as well. This is a hugely competitive area now, with many new funders entering this market. Customers can make great savings (sometimes thousands of pounds) by simply carrying out a card processing review via a specialist broker. A simple way to save money for your business.
F) What security does your bank hold over you & your business?
- Many clients are unaware of what security the banks hold over their business and what impact this can have if things go wrong. It is vital that all businesses review this point to clearly understand their obligations in the event of business failure or debt enforcement. Initially this can be reviewed by your accountant or a Banking Consultant, but may need input from a solicitor to ensure that you have received the correct advice in this matter
G) When was the last time you reviewed your funding needs with someone other than your own/existing bank?
- Most customers have been with their incumbent bank for a reasonably long period of time and this can be a positive point when dealing with ongoing funding requests. By using an FCA regulated Commercial Finance Broker, the can assess your request & take your funding application to a large panel of funders. By doing this your broker will negotiate the most competitive terms from High Street Banks, Challenger Banks & Specialist Funders. This will ensure that you get a balanced view of the available funding options, across all funders.
Funding for businesses has changed dramatically over the past 5 years and continues to evolve on an almost daily basis.
The Big 5 Banks still have a hugely important part to play in funding UK Businesses, but Challenger Banks & Specialist Funders are providing significant levels of support, when the traditional funders cannot assist.
Aldermore, Shawbrook, Metro Bank, Masthaven, Archover, Interbay and many newer funders, may not be quite household names yet, but are growing rapidly and support funding across many sectors.
Put simply, there has never been a better time to review your banking & funding requirements