Download - What bankers want seminar
Welcome
Introduction to seminar
What do you hope to learn in the next two hours:
Burning issues?Topics of interest?
Opportunity to network
Have fun!
Learning Outcomes
Applying for a loan
Refinancing
Switching banks
Managing your banking relationships
Section References
Applying for a LoanSection Twelve
Refinancing Your DebtSection Thirteen
Managing Your Banking Relationships Section Fourteen
Applying for a Loan
To achieve a successful loan application:
Provide all relevant information
Professional presentation of information
Applying for a Loan Hint
If you follow the guidelines as detailed in the book, you will be well prepared, better informed and more confident in your approach to potential financiers
Loan Application Information
Personal
Historical
Forecasts
Assumptions
Loan Application Information
Personal information
How you manage your business
Credit history
Personal guarantee
Loan Application Information
Personal Information may include:
Personal assets
Tax returns
Personal bank details
Credit history
Page 83
Loan Application Information
Historical financial information:
BAS statements for the past four returns
Current accounts receivable and payable schedules (debtors and creditors lists)
Bank statements for the past three years
Details of any current or previous bank or other loans
Details of any other types of financings such as leasing or hire purchase
Previous bank relationships
Key customer relationshipsPage 85
Loan Application Information
Forecasts
Cashflow
Profit and Loss
Balance Sheet
The Funding Application
Purpose of the loan
Amount of the loan
Term of the loan
Servicing the loan
Security for the loan
Presentation to Financier
The loan application package
Meeting with the financier
Role of advisers
Page 86
Applying for a Loan – Tip
The more information you present to the financier about your industry, the company, key management, and your marketing plan, the easier their job becomes to review and support the loan application. Loan officers agree that a complete, well prepared loan application will go to the top of the pile
Refinancing Debt
Lending institutions
Debt products
To a single facility or product
Total amount of the borrowing
Repayment amount or timing
Security
May involve changing:
Page 87
Refinancing – Hint
Refinancing can involve a number of alternatives. To receive the best outcome ensure that you understand all the alternatives before committing to a new lender
Refinancing Debt
Why?
Improving interest rate
Switching to fixed or variable interest rates
More flexible features
Increasing your overall borrowing
Changing cashflow commitment
Consolidating debts
Releasing security
Page 88
Refinancing – Common Dangers
Underestimating the:
cost of payoutingoing costs
Asset security used to support multiple borrowings
Change in security valuation
Impact of leaving a long term banking relationship
Page 90
Refinancing – Benefits
New perspective based on your current position
Access to increase in debt finance
Consolidation
Restructuring security offering
Page 89
Refinancing – Tip
Refinancing a strong healthy business may also mean that there is an opportunity to separate your personal assets from security offered if the value of the business assets are sufficient to cover the borrowing (i.e. commercial land and building, debtors, fixed assets etc)
Switching Banks
Good banking relationship is critical for business
Switching banks should entail good groundwork
Before switching, consult current bank to discuss issues
Page 91
Switching Banks – Hint
Use the Small Business Victoria Loan Finder found on the website to help assess what each bank can offer
See page 91 for link
Switching Banks
Preparation is the key when considering switching.
Steps to prepare:
1. Create a list of all bank accounts in your business
2. Obtain a letter of facilities
3. Select your top three preferred banks
4. Meet with your current bank
5. Review your current bank offer
6. Meet with alternative banks on your list Page 91
Switching Banks
Before switching:
Will the new bank agree to fix pricing for a period?
Will there be additional costs as a result of switching banks?
What is the new bank’s service level?
Give preference to the bank which allows you to meet with the bank staff other than your account manager
Page 92
Switching Banks - Tip
Comparative information on bank finance is available on the CPA Australia website
See page 92 for link
Banking Relationships
Annual review
Continuing relationship
If difficulties arise
Banking Relationships - Hint
Good relationships with your bankers will ensure that they understand your business and are in the best possible position to provide advice and support when needed
Banking Relationships
Annual review on anniversary of bank loan orannually when financials available:
Need to take seriously
Bank have wide reaching powers over providing facilities
Should have all information ready
Be candid if things are not going well
Ask for improvements if business has improved
Page 93
Banking Relationships
Continuing Relationship:
A 'hands on' approach
Growth business can expect assistance
Keep the bank well informed – ‘the good, the bad, the ugly’
Use your banker to assist in business operations
Page 93
Banking Relationships
If difficulties arise:
Generally, banks can 'call in' loans
Usually notified by conversation or mail
All facilities 'called in' must be notified in writing
Keeping the bank informed is the best management strategy
Page 94
Banking Relationships
If difficulties arise the bank may help by:
Agreeing to change your borrowing arrangements to make repayment easier
Assisting you with plans for improving cashflow and profits
Recommending that you discuss your problem with your accountant or put you in touch with independent advisers
Choose your banker like you do your doctor!
Banking Relationships - Tip
How to Handle Your Bank
Be well prepared before approaching bank for a loan
Ensure that there are benefits before switching
Develop a good banking relationship
Keep the bank well informed – good and bad
List 3 actions you will follow through with as a result of this
workshop
Then
List 3 things that you’ve learned in this seminar
List 3 actions you will follow through with as a result of this
seminar
List 3 things that you’ve learned in this seminar
Business mentors help you to identify a clear direction for you and your business.Business mentors can also advise you on how to:
conduct market researchwork out your break-even pointprice and/or cost your products or servicesdevelop an effective marketing strategyuse other business management tools
To arrange a session with a business mentor go to:
www.sbms.org.au/OurPrograms/SpecialistVouchers.aspx
and type in AFS as your code
Using your SBMS voucher
Questions?
Thank you for attending
Check outbusiness.vic.gov.au/workshops
for more workshop information