Is it that time already? With many businesses having year-end’s in December and March now is the time that banks will be expecting to see Annual Accounts and to review overdraft facilities.
In the past we could rely on our bank managers to get in touch and remind us of this and then to conduct a review with the outcome usually a continuation of the overdraft (subject to a fee). Not so now.
Regulatory changes make an overdraft quite an administratively painful form of lending – with quite a lot of work behind the scenes and not much income to come from it, especially if a business makes light use of the borrowing. This is one reason by they are subject to such close scrutiny and banks would prefer to extend cashflow support by invoice discounting packages.
So don’t take your overdraft for granted and prepare well for this important meeting/discussion. That should include:
- You be the one most aware of the review date and plan ahead of that to think about what you want out of the meeting
- Think about what you need from the bank over the next year and how you can substantiate that (cashflow projections the most obvious way)
- Pull together all the information that you need to ‘tell the story’ of how things have gone for the business since you last met. That might mean that you have to ‘hurry up’ the production of your year-end figures of course. A good presentation document doesn’t just inform and impress the bank but it also makes it easier for the bank manager to handle the communication that they have to do internally – don’t leave it to chance that he or she will do that as well as you can.
- Take the lead in organising the review meeting on your terms as far as possible
The main message is that this is an important event – and worth taking time over