Pathfinder – Business question of the month (November)

Tim Levey, Chairman and Head of Business Advisory, runs two groups of Business Leaders in Kent. One of the members recently posed the following question:

“With the current economic uncertainty, it occurs to me that our overdraft had remained at the same level for many years, while turnover has gone up 50%. I am minded to call the bank to sound him out over an increase. What experience do others have from doing this?”

Advice included:

1. Our bank keeps changing managers, but they have always been open for a conversation and have been assured by proactive “just in case” conversations rather than it being taken badly. Banks like to see that you are in control, contingency planning and being aware of market conditions rather than reacting to things.
2. If you go back 10 or 15 years then banks could react badly to any request for extra funding. If your track record is good then there should not be a problem these days
3. If you leave it until you really need the money then they have you over a barrel. As long as the core of your business is solid you should have nothing to fear. Always better to ask when you are not desperate.
4. I asked before I needed it when the business was young. The response was not what I wanted (it was the height of the banking crisis) but I then had time to work out other options before I was desperate. I personally always have open conversations, warts and all, with my bank and so far this has worked.

If you would like to join one of the Intelligo Business Leader groups that discuss these types of issues then I would be interested to hear from you. Please contact Tim Levey or on +44 (0)330 124 1399.

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