The great majority of bank facilities have set renewal and/or review terms. The most efficient, and most likely, route to securing funding is to stick with your existing provider – but, no different to any transaction, you should keep your options open by looking at one or two alternative banks as well as possible non-bank alternatives.
If you are looking to stick with your existing bank, remember that there is no emotional element involved. In simple terms, if your application would not stand up as a NEW applicant, it’s highly unlikely that it will bear scrutiny just because you have been a loyal customer for some time.
There is a well know acronym in banking – CAMPARI. You will need to pass all these tests if you are going to secure funding from a bank:
Character: Show you are a competent business leader with a good trading history in that sector and a sound management team
Ability: Show you will be able to repay the money
Means: Demonstrate you have the means and resources to run the business in a way the bank approves
Purpose: Be clear what the money is for and that you have thought it through
Amount: Demonstrate why you need that cash and how it will be spent
Repayment: Forecast your cash flow to show you can meet repayments
Insurance: Show you have removed risk from your business by taking adequate insurance to cover anything that could go wrong.
Remember, also, that banks rely heavily on “credit scoring” in their decision making. Make sure that you check your own business credit report. It will help you find out where you stand, how you can make improvements and also gives you the chance to spot mistakes. You can get a credit report from the likes of Experian, Equifax and Callcredit
Informed Funding largely covers types of finance and suppliers of finance that you may not have heard of. We do not cover high street banks which, by and large, are easy to find and have broadly similar offers – particularly when it comes to risk assessment. If you are looking for a list of Banks that supply business finance, take a look at . This is a website supported by the British Bankers’ Association.
If you have been rejected by a bank, worried that you might be, or simply wishing to line up alternatives, then take a look at Peer to Peer lending options.
