Like many in business, I have heard a number of horror stories about the “originally friendly bank” turning the screw with unsustainable demands when market conditions change – and usually at the time you need the bank the most. When choosing a Bank you are looking for stability, a good history of lending and naturally you also have to consider commercial terms and any added value services the Bank provides. However, because most Banks offer the same basic service, choosing a bank usually comes down to more “touchy feely” criteria such as trust, their understanding of your business, potential business contacts they can offer, the ability to challenge and offer ideas in a positive way and most of all for the Bank to be consistent in their approach. The culture of the Bank should reflect that of the business wherever possible.
Without sounding too obvious the choice of a bank should also be looked on as a long term commitment. The most common quotes I hear from other businesses disappointed in their banks are “we only see them when times get tough”; “they’re happy to lend when we don’t need money but won’t lend when we do need it”; and “at the first sight of problems our rates go up and their stance becomes much tougher making it even more difficult to trade”. All these are symptoms of a poor banking choice and/or relationship where neither side fully understands where the other is coming from.
If we are to emerge from this current tough trading environment, then the banks need to work closer with the engineering and manufacturing sector and understand the importance of investment in securing long term prosperity. Without a partnership approach, the banks could leave the sector non-competitive in a global market.