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Which banks would be likely to be a good fit.

Growth company in civil engineering sector, looking for better bank fit.

A profitable, growing client in the civil engineering sector is looking for a bank overdraft facility.

This would be to cover cash tied up in debtors, mainly blue chip and potentially needing to fund a transition for vat from the cash basis to the accruals basis.

Could any community members out there give a steer as to which banks may be a good fit for this sort of business scenario?

Comments would be much appreciated.

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31st Oct 2017 21:17

Is the only security the sales ledger, if so most banks will push you down the invoice financing route.

Santander is the only bank I actively recommend as you can actually get to speak to them and they are more savvy when it comes to understanding business in general.

A decent overdraft Is hard to come by these days as banks don't like them unless bricks and mortar security is available.

Possibly look at crowd funding like funding circle if you are looking for some working capital. I got £30k for a client we put the papers in on. Monday and he got the money on Friday.

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By Albie
to Glennzy
01st Nov 2017 14:04

Many thanks Glenny,
That is very helpful

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01st Nov 2017 10:26

I would echo Glanny's post.

What the banks may try to do is get you hooked on an overdraft that is "deep", ie never paid over ay any point in the month so effectively a loan, and then when you have a problem they will pull the overdraft overnight, effectively freezing the bank account and then frog march you over to the Factoring division so they can up their charges considerably and put you into credit card levels of interest. if you 'tread water' in that state they will make a huge rake off from you. If you go bust, equally they are happy as they will be a secured creditor and make a bomb on insolvency from you. Both scenarios are much more profitable than you paying for just transactional banking which is a "loss leader" for banks.

To counter that take possible several small loans over different terms from someone other than your normal transaction bank, and only operate a small overdraft facility such that you are in the black for at least part of the month. They won't be able to pull the rug.

if you take "one big loan" its much harder to refinance than small ones even if the notional cost may be lower.

And finally sort your cash cycle out, many business are poor at managing that. Simple things such as billing at the start not the end of the month or quarter can make huge differences and Blue Chips don't bat an eyelid, their metrics are all about how long they can stall out the payment from the date of the invoice. So move the date!

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By Albie
to ireallyshouldknowthisbut
01st Nov 2017 14:06

That is very helpful,
Many thanks for the great advice.

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02nd Nov 2017 11:00

By Peg Leg.
I have in the past year moved my account to Handelsbanken, they actually have managers!
My branch in a small town 40,000 pop has 7 staff in total. 2 business managers, 2 personal banking managers, 1 branch manager and 2 managers assistants.
They do all their own telephone answering, will meet you at the drop of a hat in your office or theirs. All lending decisions are taken in branch, not an anonymous head office. Just visit and see!

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to n.challacombe
02nd Nov 2017 12:50

I worked for a major bank for 28 years in commercial and would echo your comments. Handelsbanken is the way forward.

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By Albie
to n.challacombe
03rd Nov 2017 09:26

That is fantastic intelligence Peg leg
Many thanks

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