How to help your bank to help your business
The past two years may feel like the longest on record for Australian SMEs. The economic impact of COVID-19 continues with supply chain disruption, significant staff shortages and ongoing challenges to cash flow management. Financial support can alleviate the pressure – or help to fund growth – so how can you get the most out of your relationship with your bank?
This question will be explored in Advivo’s ‘Lunch and Learn’ event, hosted in partnership with St.George Bank on 2 March. Owen McGuigan, Relationship Director Industry Banking at St.George, will discuss how SMEs can leverage their relationship with their bankers to access the commercial support and solutions for their business.
“The better we understand your business, the better we can help you plan for recovery or support the new direction you may want to take for the future,” he says. “Your relationship with your bank should go beyond the numbers so that we know the story of your business.”
Funding your recovery
Close banking relationships can help SMEs tap into financial support schemes, such as the federal government’s SME Recovery Loan Scheme, which expands the lending criteria for businesses adversely impacted by the pandemic.
The scheme has been extended to 30 June 2022 and is open to businesses with an annual turnover of less than AUD250 million that have been operating for more than 12 months. Loans can be used to buy commercial property, to invest or to acquire another business. Eligible customers may also be able to use the loan to refinance existing business loans.
“To access the loan, you need to show that you have been adversely economically impacted by the pandemic, and I can’t imagine there are many businesses in the country that haven’t experienced that in some way,” says Owen, adding that an understanding of a client’s business can help speed up the approval process.
“When assessing a loan application, a bank would typically ask for your most current financials, but most businesses that are economically impacted are not going to have typical trading results to show,” he says.
“The government scheme allows us to look at prior trading periods and consider if your business could have sustained a certain level of debt pre-COVID, or to look at your forecasts and discuss how your business has changed. This is why open conversations with your bank are so important.”
Looking beyond the numbers
Owen regards banking relationships as a two-way street.
“Invite your banker into your business to show us how it works, or flick us an email when you’ve won a new contract or an award. If the only interaction that your bank has with your business is a set of financials, we may not be seeing the bigger picture. Being able to explain how your business is operating can provide some context to the numbers.”
A close and collaborative relationship with your bank can help them to give you the support you need, but Owen adds that the numbers are still important.
“I’d recommend having a good relationship with your accountant so that your financial data is up-to-date,” he says. “This will support the conversation you have with your bank, so you can confidently say, this is where we’re at, where we’ve been, and this is where we’re going.”
Please register now to join us on March 2 and find out more about how to make the most out of your banking relationship.