Bankers have had a torrid 12 months. The banking landscape has certainly changed in 2007/2008 and will continue to change over the next 12 to 18 months. Many banks have returned to a position where their managers are out in the field talking to customers about their banking requirements. It is more important than ever to ensure that you have a good relationship with the bank and that you keep them informed as to changes in your business or problems you have or plan to have. Bankers don’t want to see businesses fail and will work with business owners and their other professional advisers to help them as much as possible. You will be in a weaker negotiating position if you approach them when you are in trouble. At the same time it is also prudent to look to spread your risk by using a variety of lenders and also to look at a variety of funding sources that might offer more flexibility. When discussing funding options with your bank ensure that you have a clear understanding about what you need, why you need it and how the business has performed, is performing and will perform in the future. Also be expecting to provide personal security for any loans they provide. One final area to discuss with your banking team is the subject of covenants and lending conditions. Most if not all funding comes with conditions (Also known as covenants) that you must meet. One of the most common is to provide to the bank financial information on a month by month basis. Banks are becoming more active in ensuring that these conditions are being met and there have been examples where overdrafts have been called in by the bank because conditions and covenants have not been met. At a recent Corporate Finance conference I met up with Kirsty McGregor, Chairman of the Corporate Finance Network in the UK. She commented “We are generally finding that the more traditional banking solutions are becoming less common, and banks are definitely tightening up their underwriting policies. More security is being required and the facility costs are going up. However, there are still many more routes for finance that can be explored” Engage with advisers Professional financial and business advisers are a key ingredient in the success of any business. As business owners themselves they are only too aware of the issues business owners need to address in economic climates that we face today. They can therefore add extra input into discussions and can draw on experience and other professional contacts to ensure that you are given the very best professional advice.