5 tips to demystify finance
Ensuring you have adequate business funding using appropriate lending products at a competitive interest rate is crucial to the long-term success of your business. However, dealing with banks to secure or negotiate funding arrangements can be complicated by confusing jargon and requirements that make no-sense. With scandals-a-plenty in the banking world it’s important you understand what you are committing to and have confidence that your shiny new banking package does in fact shine when you need it.
Drawing on 35+ years in the banking sector Hanrick Curran’s finance specialists have compiled their top 5 tips to ensure you come out on top, avoid nasty surprises when the going gets tough and get the best deal.
- Always read the documentation you’re signing – It sounds like common sense however it is surprising how many businesses get caught up with undocumented promises from the Relationship Manager which cannot be relied upon in your hour of need. Be cautious, read the documentation and don’t sign anything until you are confident you understand what you are entering into.
- Ask for clarification – Banks are prone to using bank jargon and quote policy and procedure when reviewing your existing facilities or assisting with finance expansion. At the time, you may not feel comfortable with raising your hand and saying, “I don’t understand” at the risk of coming across financially inept or causing delays. However, it’s crucial you seek clarification and think about the impact the commitment may have on your business long term. If speaking up and exercising a strong line of questioning is not your strong point, engage a representative who is well versed in the industry to act as a mediator.
- Ask for several opinions – If having a mediator in the room when negotiating or being presented with the funding terms is not feasible, take time out and seek the opinion of another professional. A financial service advisor, such as your accountant can review and explain the bank jargon to you in a way that you understand and can clarify how that reflects on your future plans.
- Remember: it’s a competitive market – As attractive as your Relationship Manager will make their offer sound, it’s worth shopping around. If time is of the essence, a finance advisor can help pinpoint the facilities you require now and into the future to ensure you are getting a good deal.
- Finding a diamond in the rough – A good bank Relationship Manager is worth their weight in gold. If you find one who does in fact understand your business and advocates for you to secure funding support with attractive terms, then stick with them!
If you are unsure whether your existing facilities are market competitive, require assistance in accessing expansion finance or need some advice in getting your banking relationship back on track, contact your usual Hanrick Curran advisor or speak with our Finance Consultant Owen Dingle on 07 3218 3900. Our team of finance specialists can provide a comprehensive finance facility review to ensure you have the right funding to support your needs now and into the future.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.