8 hot tips on how to get more money from your bank manager….
Author: Russell SmithApril 17, 2012
Banks eh? First they send you millions of letters with offers of new credit cards (circa 2005) then they crash under the weight of their own hubris and go to ground whilst taking all the money with them!
The funny thing with banks is they are a business supplier, of bank accounts, financial transactions and of course money. However, they are really a business client since they won’t give you any money unless they really believe in your viability and trust you with their finance.
Despite the current lending from banks, there is still money around so here’s some top tips on getting money from your bank manager:
1. Banks have an ace up their sleeve, they’ve seen your business bank statements. If you bank with the same bank personally, they’ve seen your life. They’ll ask you to fill out an assets/liabilities, income/expenses sheet so don’t make it up – they know if you are trying to fool them.
2. Banks care about risk and reward. If they lend money to you, they will ask themselves – what is the risk of them not getting it back? In the current climate, they want the risk to be as close to zero as possible. Understand this with all your communication to them. You may think you have a business that will take over the world (and you may have), but banks aren’t interested in ‘may’, they are only interested in what will you actually do and, again, they pretty much can predict this from your bank statements.
3. If you need money from a bank, tell them 3-6 months before you REALLY need the money. If you go to them desperate, then your chances of getting any are impaired. So if you’ve got a reasonable bank balance now and want to grow your business and need cash to grow, now is the time to go to the bank – not when you are close to running out.
4. Know how much you want/need and what you are going to do with it. I can’t emphasise this enough – do not, under any circumstances, be fuzzy!
5. If a business plan is required, get a really decent firm of accountants to do it (e.g. us!), if the numbers don’t add up, are inflated and not realistic, the bank will see right through them. Remember, they know your business already, they know more about your sector then you do, you may be the exception to the rule but the assumption is that you are the rule. If you can impress them with a really decent presentation to raise finance (and numbers are only 50% of the presentation), then you are 75% there.
6. Unless you get really lucky, prepare to put ‘skin in the game’. Either your own cash or a personal guarantee. There was a time when they didn’t ask for it, that time has mostly passed.
7. If all 6 tips fails, change banks.
8. If all 7 tips fails, look for other investors, friends or family. There is cash around, you just have to find it!