We’re going to open this article up with a story straight from the archives. Once upon a time, we knew a bank manager who would never finance a baker. A middling pub with decent financials? He’d consider it. A leasehold manufacturer looking to buy its freehold? He’d make an informed decision. A freehold bakery, with stellar financials and 30 years’ experience? Not even a look-in. Why? Well, at the start of his career, when he was a fresh-faced underwriter, he’d been involved in a disastrous loan where everything that could go wrong, did. Who had taken this loan out? As you can probably guess, a bakery.
Now, what was the point of that story? Well, it’s to make sure that we all remember that bank managers are only human. When we talk about “bank managers”, it’s tempting to think of them as some nebulous part of the finance process. With the decrease in public access in the last several decades, the image of “the bank manager” is an almost comic-book-esque shadowy figure pulling the strings. It’s easy to forget about the actual person that will be sitting at a desk reading an application, but it’s a vitally important part of finding finance.
As we’ve shown, bank managers don’t make decisions purely based on the numbers. We think that it’s important that they don’t – one of the big problems with the rise of AI and algorithms is that they often don’t recognise the reality of a situation. The majority of bank managers don’t have the extreme level of prejudice that our example displayed (and we’re not making him up – he really was someone we worked with!), but most will have their own preferences. So how do you navigate this minefield of preferences and personality when your business needs finance? Well, as is a bit of a theme in this Newsletter – you do it with a broker. You’ll only deal with a particular manager once. That’s not exactly enough time to get to know them, is it? A broker, though, could be sending dozens of applications their way, and will be talking to them on a regular basis. They’ll get to know the exact preferences of each of the bank managers they deal with – and can use that to make sure that your application ends up on the desk of the right one. So with a broker, no bakery ever has anything to fear from a bank manager ever again.