tom123

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Don't ask a banker for an umbrella

4th Oct 2014

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tom123

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We are attempting to change bankers at the moment. It seems one of our prospective banks is living up to the adage that a banker will only lend you an umbrella when it is sunny.

The business is profitable, and currently runs with credit balances in the bank due to customer payments on account (manufacturing capital goods).

We would like an overdraft to be available if required, should we take customer orders where they will not pay stage payments.

So far the bank want:

3 x cover of book debts

Mortgage on commercial property

Personal Guarantees.

Our turnover is £4m, and we are looking for £250k.

It seems to me the bank want belt and braces - but then it has been a few years since I last did this type of thing.

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By User deleted

06th Oct 2014 08:14

This seems the way of things nowadays ...

Encountered this a couple of yeras ago -

https://www.accountingweb.co.uk/anyanswers/question/example-banks-have-n...

Banks seem to categorise risk as a one way process. Any money you leave with them is regarded as their own to do with as they wish; often speculatively - whereas if it's the other way round they way more than their pound of flesh

It used to be that the cover and interest relflected they risk in lending, however, nowadays most of the bank managers (if you can find one) are salesmen and failed used car dealers. So all they are interested in is refusing to exercise judgement (head office rules) and stiffing the client for as much as they can get away with

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