The world is a pretty negative place when it comes to banking these days, and with good reason. However, the commentary on banking, in my opinion, is unbalanced, and as a result of being more balanced, can help business owners develop a better mindset. In turn, this will move their business forward.
The major noise is "the banks aren't lending". It's just not true; I've gone into detail on what actually happening in other articles, and last year's well received Commercial Mortgages Report.
What banks are doing is lending to businesses which have good management teams, a robust business model, and a future that looks bright. This is the essence of the banks taking a lower risk view.
The world does not want banks lending funds to risky business, because these businesses in most cases fail, and it results in even more economic mess. The world has the problems it has because of risky lending; we can't have it both ways.
The second major point to note is banks do not approve/decline by computer. Much of the decision making is down to interpretation, and banks will take a view on areas like CCJs, understandable losses, or a substantial re-investment that will boost next year's profit margins.
If you're unsure about whether a bank will lend to your business or not, a commercial finance specialist can be of great help.
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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.
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.