It may be time to out manoeuvre the bank

In the present difficult economic climate many businesses are facing increased levels of debt to their bankers.

Some bankers’ primary concern is to improve their own balance sheet which means calling in or reducing your overdraft. This can be crippling even for a well managed and profitable business.

Other banks are willing to support a business over the medium to long term. The market place is in flux with different bankers taking very different approaches.

Every businessman should be aware of the general policy of their own bankers and the factors a bank will consider if it is to maintain or grant lending facilities.

In the current climate any business should be prepared to approach a bank whether existing or new for the facilities it really needs and clearly thought out proposals to service those.

A business which is stretched needs to put in place a plan of action to meet the possibility of its bankers reducing or calling in existing borrowing.

Take advice early.