KIRKLEES companies must get used to “behaviour change” among Britain’s banks – and welcome their stricter application processes when seeking bank finance.
Neil Muffitt, managing partner at Cleckheaton-based FDYL, was commenting in the light of banks tightening up their lending criteria and a “significant” increase in referrals to FDYL – a leading provider of interim finance director services – from the region’s banks.
He said: “Banking relationships have changed forever and unfolding events in Europe can only make borrowing conditions more stringent.
“However, companies need to recognise the real value of the application process.
“The figures required by the banks illuminate the true financial position of the organisation. Far from regarding lending applications as a box ticking activity businesses should welcome the insights that they provide.”
Said Mr Muffitt: “There is no doubt that many businesses regard lending applications as extremely onerous, especially when the bank appears to be changing the rules.
“However, the first thing businesses need to do is to change their attitude to the process – put simply this is the new reality and its here to stay. There is nothing on the horizon that suggests a more relaxed regime will emerge.”
Mr Muffitt said: “Given the undeniably difficult conditions for so many businesses, it is hardly surprising that banking relationships are under pressure and many business owners are increasingly convinced that there is no point approaching the banks for extra funding.
“One of our core roles is repairing banking relationships on behalf of clients. Banks can and will lend against sound proposals.
“However, businesses must change attitudes and behaviours to reflect the realities of the situation.
“Above all they must learn to accept and act on the facts that emerge from preparing these proposals.
“They can be tremendous value to the business moving forward.”