Building “that” Banking Relationship - PowerPoint PPT Presentation

Building “that”

Banking Relationship

NOV. 2012

Debt or Equity what would be the best option?

• Deciding between equity financing or taking on a loan is a challenge all SME owners face. Should you go to a bank and apply for a business loan? Or should you look for an investor? 

Key steps

• Building a Business Case
  • Knowing your need

  • Understanding your business risk

  • Role of finance manager/auditor

  • Presenting your case

• Develop internal controls in the business.

• Identify business challenges and potential opportunities for greater efficiency and results.

• Identify potential financial risks eg. liquidity in the business.

• Detailed analysis of financial data and its underlying reasons

• Periodic Reporting to Banks.

• Assessing the suitability of bank capital as a source of funds for the business. 

• Matching business needs of capital with different products and services of the banks.

• Preparing an thorough application for bank finance.

• Share a detailed utilization plan of the facilities requested

• Have a mechanism regularly update the bank of material changes to the business

• Banks are in the business of lending and risk sharing

• Banks seek information which is quantifiable, verifiable and sustainable

• Different banks based on their preference and internal know-how define and operate in target markets of their choice

• Lending is based on a variety of factors which the bank seeks to asses

Re a son

Absence of reliable information

Inadequate accounting & financial statements

High Risk Perception

Lack of proper feedback/references from market

Historical performance unavailable