• Friday , 17 August 2018
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Business Banking

Working with your business banking manager

1. Information gathering

  • Financial statements
  • Management accounts
  • Business plan
  • Financial forecasts
  • Budget planner
  • Statement of assets and liabilities
  • Bank statements

Information gathering – more information

Business banking managers will ask you for a variety of information so that we they build a picture of your current and forecasted situation, ensuring that the necessary documentation is available to make an INFORMED and RESPONSIBLE decision. It also helps them to understand how your business would service a loan. This is an essential element in ensuring whatever solution is provided it is the most suitable option and doesn’t put your business at unnecessary risk. It also helps them to respond to your application quickly and honestly giving us the opportunity to request further detail if required.

The level of information gathered will vary for each situation but it will be difficult to progress a new lending proposition without obtaining and considering the following…

  • Cash flow analysis
  • Business plan
  • History of your trading records
  • Statement of assets

Providing robust information such as this enables the bank to reach a responsible decision in appropriate timescales for both you and your business. Your business manager will talk you through the type of information required during your consultation today.

Level of detail provided below in the event of customer questioning.

Financial Statements: The latest Financial Statements, covering at least three years historic trading – final accounts if possible, rather than draft. If your business is a start-up – do you have financials on any previous Business(es) that you’ve run?

  • Management Accounts: The latest available management accounts covering the current trading position (since the last Financial Statements).
  • Forecasts / Business Plan: Details of your future expectations for the business and the assumptions that have been used in drawing these up
  • Statement of Assets, Liabilities, Income & expenditure: Gives details of your personal financial position, & will be requested for most family businesses
  • Bank Statements: Unless you are an existing customer (of more than 12 months), we will request at least six months statements (business and personal accounts)
  • Certain loan requests may require specific information – such as estimates, invoices or copies of quotes

2. Questions and Answers

  • What is your business history?
  • Does your banking history support your application?
  • What is the purpose of the loan?
  • Does the amount in question achieve the required purpose?
  • What is your personal investment in the business/ venture?
  • Is the loan affordable?
  • What is your repayment plan?
  • What impact to the business will the lending have?
  • What Security are you able to provide for the facility?

Questions and Answers – more information

For all loan applications it is essential that you meet with your business manager once you have all the information together. They will then assess your financial information and spend time understanding more about your business and the loan purpose.

You will see above there are a list of some of the likely questions that may arise.

Your business manager will need to have a good understanding of:

  • Your business history and expertise (Second Source of repayment)
  • The purpose of the loan and your business investment (Stake)
  • The ability of the business to meet repayments (Serviceability)
  • Right the way through to the potential security that may be required to secure the application (Security)

Be ready to answer these questions as it gives your business manager all the facts they need to make a considered evaluation of your application.

3. Assessment and Decision

  • Built through information gathering and questioning that establishes:
    • Sound purpose for the loan
    • Ability to service the loan
    • The business Investment
    • The fall back position
    • The loan security.
  • Decision delivered
  • Within reasonable timeframe
  • Alternative solutions explored if required
  • Appeals Process

Assessment and Decision – more information

The quality of financial, and business information gathered as part of your meeting will help your business manager make that lending decision.

Business banking managers want to support you and your business and so will work with you to ensure your application is sound.

They will be open and honest about the feasibility of your application. And you can be confident that our decisions are based upon the robust analysis of the first two stages of essential information gathering and questioning.

There are occasions where they are unable to provide the finance you have applied for, but should this happen, they will clearly explain to you the reasons for their decision, and the steps you can take to support a further application and/or look for alternative solutions if required.

There may also be times where they feel that, because of the risks involved, the best structure for your requested finance would be by way of permanent equity in the business rather than bank borrowing with its resulting repayment programme. This would mean increasing the owner’s stake in the business and if necessary, this could involve an approach to request help from some Business Angels (your business manager will have details)

Should you still be unhappy with this decision, they do have a formal appeals process which you can ask them to begin.

From the point you receive notification of the decline, you have 30 calendar days to ask for an appeal, which would be assessed by an experienced internal lender who is not the same person who made the decision to decline the original proposal. Once the application has been reviewed verbal confirmation of the appeals outcome will be given & followed up in writing.