Are you keeping your bank manager happy?

In this current economic environment, banks and finance companies (those who are left) are constantly reviewing their exposures. Initially their review is based on industry analysis, and then they look at your performance compared with your budget, and the industry norm. They will be particularly targeting borrowers who are struggling to meet their loan covenants and this may be as simple as:

• furnishing financial statements on a regular basis, e.g. at least quarterly, and certainly annually
• providing written commentary on the business activities for the period under review
• providing the annual forecasts within the specified timeframes. It is important that these forecasts are achievable as they form the basis for the lenders KPI’s.

The review of the performance of your business against the lender’s own measures is to ensure that their investment in you is not at risk, which could give them reason to increase rates and fees or worse still, terminate their facilities.

Taurus Group’s bank advisory division is led by David Kitson and he can assist you in making the bank / client relationship a lot smoother by:

• reviewing all specific performance ratios,
• discussing the covenants from a practical point of view,
• reviewing your Letters of Offer to ensure that the rates offered are competitive,
• ensuring that the covenants set by the lenders are achievable,

Many borrowers do not understand their covenants, let alone be aware of their ability to “negotiate” them with their bank at the time of review.

If your bank manager is happy, you will (generally) be happy. Give David a call on 03 345 8834 if you would like some assistance on working with you and your banker.