The funding that the Treasury organised to provide ailing businesses with liquidity during the worst periods of COVID disruption, were not attractive for the banking sector. Even with the underwriting provided by government, bounce-back and similar loans were simply unprofitable.

Which may go some way to explain a recent tendency that banks seem reluctant to set up accounts for new businesses.

Better the devil you know…

One way to circumvent this close-down in funding is to make sure that any existing banking arrangements are managed effectively. For example:

• When was the last time you spoke to your banking advisor?
• If you have managed to produce acceptable accounts during the pandemic, have you sent a copy to the bank?
• If you must push at your funding limits, produce forecasts that demonstrate the amount of additional funding that may be required and what plans you have in place to repay loans or reduce overdrafts in the future. And do this before you exhaust your present liquidity.

Now is not a good time to reduce communication with your bank even if you are suffering financially due to COVID disruption.

Manage your bank as you would manage all your business relationships and if you need help considering your options – if funding looks to be an issue – pick up the phone, we can help.

Source: New feed