30 Jul Putting yourself in the best possible position
Series 6 – Bank Negotiations
Robinson Sewell Partners is excited to release the final of six mini documentaries on Business Banking. These are the critical insights that all agribusiness and commercial business owners need to know in understanding the dynamics of their funding requirements and how it dovetails into the spherical world of banking.
More on that later…..
Farmer Wants a Finance
Robinson Sewell Partners is a keynote speaker for the Famer Wants a Finance workshop held by NSW Farmers in Dubbo on Sat 15th August 2015 from 1.30pm onwards.
If you are a young farmer who is interested in purchasing your own property, this workshop will provide the opportunity to discuss the process with experienced peers. Particular attention will be provided to methods of purchasing without an established Young Farmer Finance Scheme.
NSW Farmers recognise that Young Farmer finance schemes and alternate entry methods are of major concern to Young Farmers starting on the land. Therefore, NSW Farmers would like to introduce you to other young farmers who have started their ventures and help you understand alternate business strategies that may be able to help you start your own businesses.
NSW Farmers have confirmed two experienced speakers who will provide essential skills to help you meet your goals. Tim Carroll, an established livestock and cropping farmer, will be joined by Brad Sewell of Robinson Sewell Partners who provide detailed credit analysis and sourcing alternative funding; negotiate and structure business loans; and restructure businesses by refinancing.
This is a free work shop for NSW Farmers members and a small fee for non-members. If you would like further information regarding this work shop or to become a member, please call NSW Farmers Member Service Centre on 1300 794 000.
Series 6.0: Bank Negotiations
This is the chapter that places some raw commentary around the banks operating mandate within the market. This is not a veiled secret but necessary to highlight as a staging post to provide some depth and urgency around the importance of understanding these critical factors when negotiating your funding position and requirements to the banks.
Be assured that with some careful preparation and presentation strategies, your desired funding outcomes and requirements can be met with ease of transactional and cost efficiency. Short cut these fundamental steps and the negotiating favour will be well in the banks corner.
If any of these topics trigger a reactive response, please pick up the phone and give us a call. We look forward to hearing from you and assisting you in placing some financial muscle back into your business.
Welcome (Transcript of video)
Hi, I’m Ian Robinson and welcome to another edition of RSP Business Insights.
Today we are going to talk about how you negotiate your funding requirements with the banks.
In context to these discussions you must keep in mind the prevailing headwinds you may experience with regards to your negotiations;
Banks are designed to maximise their revenue and returns on resources expended.
The delivery of your business to the bank’s internal key stakeholders and decision makers depends upon the experience and quality of the front line manager who acts as the conduit between you and the bank.
There is a potentially limited understanding of your bank’s position with regards to your industry code and its related policy parameters.
Banks cost of funds are opaque at the best of times.
AND Transparency on client margins and product offering is also generally quite clouded.
So to distinguish your business to the bank in a way that will meet your expectations in pricing and structure, it is vital that you capture some of this market intelligence to garner what pressure points you can focus on and what you can’t.
In lieu of all this, preparation and presentation is the key. You can limit any translation or transition error by presenting your business in a format that is clear, concise and is bespoke to bank policy format.
Good corporate governance and market intelligence can be attained by formally tendering your business to a panel of banks. This will provide critical financial feedback about your business and what the financial markets can offer your business at any given time.
A caveat to this strategy is applying caution. Your presentation to a panel of banks will be on file and the timing of your presentation is important with regards to where your business currently sits within your business cycle. If your business is not bank fit, or there has been some accidental critical omissions, it is difficult to change the perception of your credit profile once it has been marked on file. This all goes back to the preparation and presentation of your business at conception.
Once banked, it is vital to maintain solid financial control and reporting to your bank to maintain a healthy and cohesive relationship. The relationship operates both ways. If you continually comply to all of the contractual arrangements with open communication you will invite a quality of service you deserve. And likewise to the contrary.
TEST THE MARKET
Also note, your business changes over time, banks evolve over time, policy changes over time, bank managers come and go. What you get set in one year may not be applicable in another. Banking is not static. It may be prudent if your borrowings are substantial to test the market every 3-5 years to ensure your banking platform is efficient and relevant to your business.
Thank you for listening in. Feel free to make contact with Robinson Sewell Partners to discuss further and I look forward to connecting with you again soon.