FACT 1. Going into the High Street branch is not the best way to source a commercial mortgage, business loan, or business banking manager
One of the big misconceptions in this recession today is the fabled media line, "the banks aren't lending". There are a number of reasons businesses and commercial property owners have come to this conclusion, ranging from disproportionate press coverage to the fact that going into the local high street branch does not yield the results it used to do.
And this is the point that is being missed.
The high street branches are more tailored to retail banking than commercial, and perform more functional activities.
The best banking contacts for assessing business, or commercial property lending, do not reside in high street branches.
Today, these senior managers are mobile, working under separate national, regional, and sector specific divisions. They are less tasked with the operational nature of retail banking in the high street branch, and focus more on the holistic needs of businesses.
They are able to look at business proposals quickly and more efficiently, with strong regular ties to their central credit teams. Many work within tight sectors, with substantial experience in that sector, and a portfolio contains similar businesses.
Often one of these senior managers is not the most local contact for the business, but the best suited. The local business manager is looking after many more local businesses of all different kinds than ever before, and is snowed under. However, the senior mobile manager has fewer businesses, but more time to serve them.
So how do you access these new contacts? Well, if the old way of approaching the bank was "bottom-up", that is to say into the high street branch and move up the chain, it is now the opposite.
Businesses need to go in "top-down", through national and regional contacts, who will assess the proposal quickly, and then find and select the appropriate contact to meet the business.
So how do you find them? The quickest and cheapest way is through non-fee charging commercial finance specialists, who have developed national and regional contacts within the banking sector.
You may think going into the High Street branch and asking for a more senior manager will help. Typically you will not get past the Manager in the branch.
I have personally come across 2 businesses this year who have been declined in a High Street Branch, but approved further up the chain.
This does not mean it does not come back to the High Street Branch Manager; in some cases it does if they are the right person. But in many more cases it does not.
So the' banks aren't lending' line is not helped by the fact that many businesses are not getting access to the right decision makers in the banks.
This is something that needs to be reported and shared, so please repost or retweet!
16 Facts At a click and a glance
1 - Why going into the High Street branch is not the best way to source a commercial mortgage, business loan, or business banking manager
2 - Brand loyalty does not pay. I'll explain why your current bank is not incentivised to offer a better deal
3 - Bank managers that understand your business do still exist, but they are not where you used to find them. Find out where they are, and how to access them
4 - The good news about Business Bank Credit policies: the criteria for assessing businesses is changing regularly, and in the main terms are improving
5 - Why your perfect borrowing history is of little relevance, and why its not personal
6 - You can profit from moving bank, right now, by accessing a much misunderstood fund, as well as improved terms
7 - Different banks like different sectors: what's happened
8 - State-owned banks: an update on where they are
9 - Privately owned banks: an update on where they are
10 - Interest only commercial mortgages: today's marketplace
11 - How a change of mindset can be of great help
12 - Why banks want to know your inside leg measurement, and why it’s not personal
13 - How to work out if a bank will lend to you, right now
14 - Debt service cover: what it means, why its important and the good news coming your way
15 - Why you may need to bank with more than one from now on
16 - If your business does not own property, nor wish to buy one, there are other, new, niche financiers available that can help with your requirements.
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About Chris Davidson
Chris Davidson is Managing Director of Discover & Invest Ltd.
He believes passionately in providing businesses with market-leading financial insights that have a positive impact on the bottom line. As a result, Chris helps get the best rates and terms available at any one time.