Now we all know that banks can sometimes be pretty difficult when dealing with SMEs and their finance requirements. However, since we are now receiving so much good news concerning the economy I thought that banks would come back to applying common sense.
I was wrong.
We had a recent client – a property development company who were looking for a loan which was around half the value of the property. A number of lenders came back with various degrees of positive feedback but one high street bank stood out for proposing something quite nonsensical. Quoting regulation (yet again) they wanted a kind of capital repayment programme which in principle would have been fine for the client. However, the repayment programme was such that the whole project would have ended up as being cash negative – in other words had the client accepted this bank’s proposal, they would have ended up going bankrupt because they could not afford to service the loan. How can that make sense?
It all shows that there is still an awful lot of hard work that is necessary when dealing with banks and raising finance for SMEs.
Have you had any experience in dealing with bonkers bankers?