Nicholsons Blogs

Today I attended a lunchtime meeting organised by Yorkshire Bank. One of the banks team was from their credit department which made the event really interesting. I write a lot of funding applications for clients and liaise with local bank managers in an attempt to put deals together that "will pass credit". 

Today though what we got to hear from the horses mouth, so to speak, was what "credit" look for in applications, and you might be surprised.

One important factor mentioned was the quality of the management team, their skills, experience and ability to achieve business plan targets and objectives.

Another important factor was the ability of the business to provide reliable and accurate management information and accounts when requested. Having the ability to demonstrate that this information is readily available when requested enhanced the reputation of the management team.

Gearing (The level of debt vs equity funding) within a business was also seen as an important factor with credit looking for sensible levels of debt and the ability to service the debt.

Of course the numbers needed to make sense also! 

I was not surprised with any of the comments but when I reflected on the way home I concluded that it was vitally important to have a good management team within the business delivering each month the business plan targets.