More and more there is becoming a right way to deal with banks, and a wrong way. In the current environment even the best businesses are having applications for new funds declined and calls by banks for existing facilities to either be reduced or refinanced. Alan Miltz, a leading authority on bank assessment processes, shares some pointers to assist CEOs avoid the pitfalls and enhance the way they communicate with banks.
Ask any banker what makes a successful business and he will tell you its cash flow. Businesses experiencing periods of high growth in particular, are often drawn in to a false sense of security. Just because you are running a profitable business, does not always mean cash is there to pay the bills, as most SME operators will tell you.
As we come to the end of an economic period of high growth, more and more we are seeing customers who are making a profit and yet cashflow is a daily challenge. How can this occur? To the non financial this statement does not make sense!