Bankers are very judgemental people. They have to be as they are invariably given limited information about their client and are expected to spot clues about risk from these. get it wrong and the banker might lose their job, or certainly have their pay impacted. If you are displaying any of these signs you may wish to think about making some changes to your business!

1) Poor Financial Reporting
Probably the number one reason why businesses fail – they don’t have a view of the scoreboard and they don’t know how they are performing. If you can’t put your finger on how your sales went for the last period, how costs compared to these, how profitable each product is that you’re selling, then how can a bank be comfortable either?

2) Poor Working Capital Management
Do you know what your outstanding Debtors are and are they paying within terms? Do you know how much inventory you have on the shelf? Is it an excessive amount or reasonable for your sales volume? Are you paying your creditors in a timely fashion?

3) Your warehouse and Office look like a bomb has gone off
Tidy business = business under control. Messy business = business not under control

4) The business has no view of the future
How can a bank take comfort in management if management have no idea why they are getting out of bed every morning. Often a reason for failure, businesses that have no plan can’t possibly be expected to recognise opportunities for improvement and threats to the existing status quo.

5) The business is continually asking for temporary limit increases
This is a sign of a business that does not know what is around the next corner and has no control of its destiny. Banks would see this as, at best, a poor business model and at worst, a business where management have no competence.

The Pearl Bankcheck service can help business management to understand if they are displaying any of these signs and can provide you with a plan to fix it. Happy bank, happy life!