Thanks to the Royal Commission, another hot topic of late is banking and lending so, I sat down with James Hodgson, Senior Banker of the Commonwealth Bank to discuss the current financial market and what this may mean for business owners.
My key takeaways include:
- For business owners, it is a misconception that banks are not lending but, if you are seeking finance it’s vital that you give the banks as much information as you can, both historical (in terms of financial position), current (in terms of the operations/statutory positions and making sure that taxes are up-to-date, BAS has been paid etc.) and the forward view (being the forecast position);
- Additionally, make sure you are better positioned not only for the bank application when you’re going in for a request but for your business by ensuring you have certain things in place such as:
– Three-way models
– Having timely and accurate financial information
– Knowing about your age creditors and debtors
– What your cashflow gaps are
– And by keeping your banker as part of your key advisory team;
- Be aware that the banks are being far more diligent in what they are looking at now – they are really considering the questions:
– Who are we lending to?
– What is it for and why?
– How are we going to get the money back?
- And, use the innovative products that are available through the bank or their website that may help improve your business – think data analytics, account features etc.
Check out the video and remember the importance of being as prepared as possible if you are planning on seeking finance.