How to Get Your Bank Manager to Say ‘Yes’ in 10 Easy Steps
Getting your Bank Manager to say ‘yes’ and lend you money can be a tough task. Seeking advice from a Management Accountant and utilising their experience and expertise can increase your chances of a positive outcome.
Here are 10 easy steps to get your Bank Manager to say ‘yes’
Create a relationship: Before you begin the formalities, talk to your Bank Manager and give them an understanding of your business. This will also enable you to understand the process more clearly as well as give you the opportunity to show that you are serious. The most important three factors in your bank manager’s mind will be management, management and management, so make them comfortable that you have a well run business.Proper preparation: As with most things – preparation is vital. Ensure you have a solid business plan in place with realistic forecasts. An experienced Management Accountant will prove valuable here.Funding foresight: Going to see your Bank Manager without a well thought-out funding proposal and Business Plan will get you nowhere. Be certain that you know how much funding you need and what you will do with this.Payback time: Bank Managers are in the risk business. It’s simple – the lower the risk, the more likely they will lend money. Meet your Bank Manager with a realistic forecast of how and when you will repay the money. Also set out the security available to support the debt; your bank manager will want to know how the business will service the debt, but also what assets are available in the event that you are unable to repay.Cash is king: Borrowing money costs – remember to include this in your forecasts. Your Management Accountant can create forecasts that accommodate your loan (including repayments). They can also forecast for a number of different scenarios, reducing the risk you pose to the bank and showcasing your experience, understanding and ability to repay.External parties: Experience indicates that lenders are more likely to consider a borrower who has used the expertise of an external party, such as a Management Accountant. Banks will think more of a management team that takes good external advice where appropriate. You may also want your management accountant or your lawyer to advise you on the Bank’s facility documentation and any security documentation that needs to be put in place.Provide commentary: Your Bank Manager eventually wants their money back. In addition to your forecasts, provide them with a clear overview of how their money will aid your business. It would also be a good idea to maintain contact with them, providing regular information on how trading is going. Send them your management information once a month to demonstrate ongoing progress. Best practice would be to include a variance analysis against the original business plan, with written commentary detailing reasons for significant variances.Identify risks: Before you go to see your Bank Manager, consider any risks such as reduced sales, broken-down machinery or loss of staff. You need to assure them that if negative circumstances occur, you are still in control and able to repay.Other lending: Business loans and overdrafts are common forms of lending, but others exist. Speak with your Bank Manager or Management Accountant to discuss what would suit your needs best.Maintain the relationship: Maintaining a strong relationship with your Bank Manager will help them to trust you. They will take a more positive view of you – which will ultimately work in your favour. Moreover, a strong relationship with your Bank Manager can prove beneficial should you need to borrow again.Getting your Bank Manager to say ‘yes’ takes preparation, commitment, and expertise – following these 10 easy steps and seeking advice from an expert, such as a Management Accountant, will boost your chances of reaching this decision.