Changing Banks

A Home Counties niche Publishing business had had a chequered financial record over the past 10 years including a botched MBO but nevertheless had increased its sales in every single year (how many businesses can say that?).

It had at last got a good blend in its Management Team and Non Executive Directors and needed a £150,000 loan to fund its development plans.

The relationship with its existing bank (Overdraft £50,000) had broken down irretrievably and early approaches to alternative banks were not encouraging- nobody seemed to understand publishing, the effect that traditional Distributor Agreements might have on lending covenants and that invoice discounting was an inappropriate financial instrument in this instance.

We knew Bank of Scotland would as usual think outside the box if we approached them on this funding project, but we also knew that one of their local Business Managers had a wife who worked in publishing and would therefore be likely to have more empathy than most with the issues involved.

We were spot on with the Business Manager’s knowledge and therefore confidence in promoting this investment case within the bank. Unperturbed by an initial refusal by his Credit Committee he appealed & won with Bank of Scotland agreeing to provide (subject to Government Small Loan Guarantee Scheme approval) £250,000 in tranches.

Morals

  • Know your bank lending profile

Know your local Business Managers within a bank who understand & may empathise with your business funding requirements