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Don't let the banks run Your Business

by Acceptance Finance

(Archived)
Monday, March 7th 2011, 10:24 GMT+11:00
Australia

A Finance Health Check should be a regular part of managing your business. It should be done at least once a year, or when there is a major change of circumstances in the business which affects cash flow. Such a circumstance is the ongoing local and global credit crunch. Many other factors can affect a business - customers going overseas for their products, changes in technology or equipment or production processes. A finance review is all about establishing financial safety nets.

Careful consideration should be given as to how and where the finance should be sourced. As with investments, you should diversify your borrowings. No one lender should have all the loans. Often, when companies have financial problems, the lender ends up running your business.

It can be difficult for small to medium businesses to ‘shop around’ for the optimum finance arrangements, particularly as it is a time-consuming process.
An independent specialist finance broker can be very effective for a company Finance Health Check. In summary, the specialist will:

• have their finger on the pulse of prevailing lending conditions and be able to access financial solutions from a broad range of lenders;
• act on your behalf in presenting your case to these financiers;
• utilise a range of financiers which will provide you with a series of good relationships rather than ‘one bad marriage’; and
• ensure that companies get the right loan structures in place such as loan terms, flexibility, special conditions and the securities that you have to provide.

Currently credit can be difficult to obtain. More information is required by lenders even for existing customers. Small business owners who present a loan application to a lender run the risk of not presenting a complete, compelling business case and risk having the Bank decline the loan. These days, once a financier has formed a negative view of an application it is almost impossible to submit further information and change their mind.

Having a good relationship with a finance broker can last for many years. The relationship will not end in two years which happens with Banks when account managers are changed.

The finance broking firm should have strong, long lasting relationships with their clients in arranging the finance for everything including their machinery, property, motor cars and more specialised finance tools. Essentially the broker becomes an active member of your team.

We have the expertise to assess and review not only your leasing facilities but all of your current business funding arrangements. Feel free to utilise this experience with no obligation, by calling our Asset Finance Specialist John Murphy on 03 9854 3586 (direct line ) or any of our consultants on 1300 93 11 55.

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