It has become very apparent that BOI and AIB in particular are open for, and are looking for business. Now is a good time for businesses to consider their funding requirements for the future as well as reviewing the current facilities that they have with their bank. Companies should also implement a strategy for dealing with their bank, and invest the time in developing a productive relationship with their Account Manager.
The following are some simple tips for dealing with banks:
- Ensure that your contact at the bank is a decision-maker ie senior and experienced enough to be able to let you know whether the proposal you are making will get agreement.
- Build a rapport and get to know their style – be comfortable discussing the challenges your company faces so that they understand where your pressure points are.
- Set time aside to meet with your Account Manager, at least 2 or 3 times per year – even when you have no requirement for funding, it is still good to maintain a relationship so that your bank is kept updated in terms of your business performance. Alternate the venue – the Account Manager should want to see your operations and plant so that they get to understand your business. Also arrange to meet at their office so that you get introduced to their colleagues who you may need to work with in the future.
- Provide the bank with a copy of your management accounts and be comfortable discussing the numbers with them.
- Prepare an agenda for each meeting with your Account Manager:
o What are the current interest rates that you are paying on the facilities that you have ie overdraft, term loan or mortgage ?
o Are you using the most appropriate funding ? ie using short-term funding to finance short-term needs.
o Are you using the most tax effective form of finance ?
o If you are a growing company, have you considered invoice finance as a means of funding the sales growth ?
o Should you consider fixing rates ? the bank will probably tell you that now is the right time to fix rates but you need to crunch the numbers !! - Finally, talk to the other banks to find out what they are offering / are they more responsive / are they “more open for business”; and consider splitting the business between two banks!?
OSMS has established good working relationships with its banking contacts, if you have a funding requirement or have queries on any of the above – please email mmolloy@osms.ie or call 087 278 3860 for a free consultation.