Why are banks important?

Because your bank is very likely to be the first source of any loan or overdraft, and they are involved with many other busineses in your type of business and geographical area.

So although you will be looking for a lender that charges a competitive rate of interest, it is also important to be able to have a lender who can ask the right questions and offer relevant experience and support..

Finding the bank and lender for you

You are probably looking to get a grant in order to expand or do something new. In this case it should not be a forgone conclusion that you stay with the same bank, however well they have served you so far. What is relevant is what support you will nee for the future and who is the best banker to provide this. Here are a few points for you to consider when you are thinking about which is the best bank and whether you should change the bank you are with:

  • Do they have a team dedicated to your type of business? If a bank has a specific team that deals only with agriculture, retail or engineering for example, they are more likely to know exactly what is going on in your sector. However well-meaning general advisors are, they just do not get exposed to the same level of detail as a specialist team
  • Do they regularly come to see your business in its own home? There is nothing like your bank manager arriving at your farm on a rainy winters day to demonstrate that they understand you. So although it takes time for the person from the bank to travel to you (and therefore costs them money), they should really understand your position and be able to be fair and realistic
  • Can you meet your representative locally? Similar to the point above, if you are able to meet at relatively short notice and with minimal travelling, you can deal with issues as they arise
  • Do they have direct phone numbers and emai laddresses? In this day and age, it seems amazing that some large businesses seem to hide behind enquiry teams and do not give you direct access to your main contact. If that bank you are looking at does not allow direct access to a specific person, ask them why not.

Pay particular attention to the overall service as well as the proposed interest rate. Although the interest sharge might be very significant, the difference between what you will pay over the duration of the loan between one bank and another may be small compared to the value one of them may give you in accessibility, relevant knowledge and the asility to deal with enquiries quickly.

Remember to ask people you trust which bank they use, and in particular ask what services they used. A bank that a friend is happy with may not suit you simply because you want them to provide a different service.

In conclusion, enquire with a selection of banks what they can offer you and assess the whole package that you get as well as the cost of it.