Unreasonable bank manager
Just doubting myself and could do with knowing what other practitioners would do..
Situation is that I have a client selling their business. I prepared "selling accounts" i.e. an adjusted profit & loss account with depreciation, interest and directors remuneration removed which I understand is the protocol in these instances and have never had a problem in the past doing likewise for many clients.
This time, however, the buyer's bank manager is being a pain in the posterior and is wanting far more information, i.e. balance sheet, depreciation, details of the business debts, how it's financed etc. Obviously I can tell the client to send the full company accounts which would show all this, but should he do so? My feeling is that the bank manager is taking the mickey and asking for completely irrelevant information. I feel that providing this level of detail may jeopardise my client's position as it would show how much the business was bought for intitially, how much debt the company has, etc., thus giving far too detailed a picture of how much profit they may make on the sale and how desperate they may be to sell. My view is that if you were selling a house, you wouldn't tell the buyer how much you paid for it and how much your mortgage was would you?
I have a sinking feeling that the bank manager simply doesn't know his stuff. Or possibly worse, that he doesn't understand that the buyer is buying the goodwill, equipment etc from my client company, and NOT buying the shares from the existing shareholders. In this latter case, I can of course see that the bank manager would need to know all about the company, but even then, surely he'd want proper due diligence and not just a look at the full accounts? And anyway, why is the bank manager worrying about balance sheet items - surely he should be asking the buyer to prepare a business plan to support his borrowing applications which the buyer's accountant would prepare?
My instinct is that the bank manager is an idiot and that the client should resist sending such detailed information. To my mind, the adjusted profit & loss account, supported by perhaps copies of recent VAT returns, details of stocks and debtor payment patterns would be more than enough for the buyer/buyer's accountant to put together a business plan to support borrowings. Or perhaps it's me being a fool? Anyone?
- Transfer of properties to a limited company stamp duty 36 2
- 6th March RTI deadline. Can FPS be submitted on 6th March? 284 4
- Goodie bag 534 19
- Husband Wife let property 218 6
- Budget 2015 predictions 318 7
- PPR for non-residents after 05 Apr 2015 304 7
- Freehold Property Depreciation 388 16
- How do I save face? 314 7
- Employee invoicing employer 50 1
- Warning - Spam "from" ICAEW 514 3
- brightpay? 116 1
- Director unable to work through illness 130 1
- Amending supplier account code in Sage 50 231 6
- Limited Company Contractor renting a house whilst working at a temporary location 372 8
- Tennants in Common - Changing % Share 140 2
- Closed PAYE schemes and auto enrolment 276 1
- Claiming VAT without invoice 412 5
- Directors loan - no longer a director 397 5
- Career in Practice 237 5
- NHS PENSIONS XFER ABROAD 97 2
- Possible Partnership? 615
- Tax and accounting treatment on long lease granted from freehold 504
- New Fangled Penalties 419
- Clubs and Taxable Income 339
- Purchase of property freehold - capitalisation of costs 308
- Loans to other companies 250
- Charity dissolution and newly merged charity 234
- Lenovo – Superfish & Komodia – is your PC vulnerable 223
- Outsource Data Entry 218
- Fuming! 216