Recognising Good Funding Advice
I spent many years as a Business Development Director for a Global Bank and would often visit prospective customers to talk about how I might be able to help. My success in winning new business often came down to one area – how good was their existing Bank Manager?
Music to my ears was the comment “We have a great relationship with our Bank Manager but their Credit Office doesn’t want to support our business”.
You must ask, just how good was that relationship? Either that Bank Manager did not understand their customer’s business enough to explain the proposal to their Credit Office, or they were not relaying the concerns of the Credit Office back to the customer. Otherwise, the customer would have understood the decision (not necessarily agreed with it) and provided additional information or reconsidered the approach.
Sure, empathy and a friendly approach are important in any relationship but sometimes the best conversations with your bank are where you are from time to time, challenged. This helps the banker / adviser gain an in-depth understanding of your business, the risks and headwinds, how you are managing those foes and what mitigants or protections has the business put in place? If nothing else, use it as an opportunity to get another opinion and gain important information for your investment decision.
It is therefore vital as a business that you are challenged by your bank. Banks have a wealth of information and experiences they can share with you. What if that Credit Office had seen a headwind you have never thought of? Better to have known about it, mitigated the risk and then reproached the bank, or possibly taken the decision to defer the request.
Don’t be put off by the challenge. In fact, expect it and consider it vital in your decision process. It helps bankers and advisors get a better understanding of your business. They are looking to be able to face the risk challenges of the highly-experienced Credit Teams – if not the Credit function is not doing its job. Without that detail, the funding request can stall or worst still, fail.
Good advice therefore, is not always agreeing with you. It challenges, it stimulates thought, it provides vital flow of information and it ensures the needs of your business are well considered. How else can you ensure the structure being proposed is the best one for your business? I suspect this is true of any form of business advice.
Hanlon Corporate Advisory Ltd
Tel 07899 982877
At HCA we can help you with your funding proposals. Our in depth understanding of debt structure, cash flows and the funders credit requirements gives us a leading edge in helping your business secure the funding you require. Please contact us today as we would be delighted to have an exploratory meeting to see where we can help.