As the major banks get to grips with the huge quantity of emergency loans that they have advanced over recent months, and look across their lending books to monitor performance ever more closely, what can you do to improve your banking relationship and protect your business from more intrusive approaches by banks?
The first task for business owners and finance professionals is to be proactive in managing your bank. You need to help your Relationship Manager support your business, by setting out and regularly updating a narrative that carries their recommendation internally. That means understanding what makes for a successful proposition, and addressing this in a constructive and informative way.
The banks are focused on a set of criteria that necessitates customers demonstrating that they have the ability to repay their loans over time, with a margin of safety. So the performance numbers, assumptions, and future projections need to align with the narrative.
Careful and regular information will build the reliability and reputation of your business inside the bank – so when you hit a bump in the road, the mindset of your Relationship Manager will be ‘how can we help”.