Today was dominated by completing the interviewing process for a new member of staff. I really enjoy interviewing and seeing how different individuals present themselves , particularly when they all undertake the same programme of a competency based interview including a role play and a presentation -we are always on the look out for special people to join Ernest Wilsons as we continue to grow towards our vision of "being the first choice for those buying and selling a business.... " After two weeks of interviewing I think we have found someone special!
In between the interviews great to be advised by e-mail that three buyers whom we have introduced to Lloyd's have had their business purchase loans agreed - brilliant - who says the Bank's are not lending!
Saturday, 1 May 2010
Friday, 30 April 2010
Busy yesterday launching some new Ernest Wilson initiatives to our staff which will improve our business. There is a real passion in Ernest Wilsons to improve all the time and it was inspiring to see their response and desire to implement some changes.
One of the Bank's telephoned me later to advise they could not support a loan request for a client buying a business. Okay that happens but what I find worthy of comment is the way it highlighted what I have felt is inappropriate in UK Banking in terms of sanctioning credit.
In this case we are talking about a £25,000 loan to buy a Coffee Lounge and Tea Room business. Input was £25,000 with support requested from the Enterprise Finance Guarantee scheme. The local Relationship Manager and the Senior Manager recommended the loan (the Senior Manager could not authorise the loan even though it was a modest £25,000, as due to the sector it required the second pair of eyes of the national credit team). The national credit team would not agree the loan despite appeals from the local team; concerned centered around the applicants experience and loan serviceability (which boiled down to judging level of drawings required). It is interesting that the local manager who had met the customer, looked in the "white of his eyes" etc had assessed the loan and was content the individual had the ability to run such a business and that the loan was serviceable. The Senior Manager added his support. I know the Senior Manager; he is very experienced.
Is it right that a national credit team, at this level of loan, can override the view of experienced local management, who have met the client, know the area and the business? Yes in some cases, particularly larger more complex cases and of course local managers can get too close and cosy at times with clients. Local managers do have targets to, but they also get "caned" for bad debt which focuses their minds also.
I do think that the balance has swung too far and that local experienced and qualified bankers should be empowered more, especially at these modest levels in non complex sectors. In this case I know the local managers have done all they can to get this loan agreed and share my disappointment - it happens.
Anyway I placed the proposition immediately with another high street bank - I shall let you know who it is if they agree it! Which I hope they will for these excellent hardworking sound people who deserve to be supported.
One of the Bank's telephoned me later to advise they could not support a loan request for a client buying a business. Okay that happens but what I find worthy of comment is the way it highlighted what I have felt is inappropriate in UK Banking in terms of sanctioning credit.
In this case we are talking about a £25,000 loan to buy a Coffee Lounge and Tea Room business. Input was £25,000 with support requested from the Enterprise Finance Guarantee scheme. The local Relationship Manager and the Senior Manager recommended the loan (the Senior Manager could not authorise the loan even though it was a modest £25,000, as due to the sector it required the second pair of eyes of the national credit team). The national credit team would not agree the loan despite appeals from the local team; concerned centered around the applicants experience and loan serviceability (which boiled down to judging level of drawings required). It is interesting that the local manager who had met the customer, looked in the "white of his eyes" etc had assessed the loan and was content the individual had the ability to run such a business and that the loan was serviceable. The Senior Manager added his support. I know the Senior Manager; he is very experienced.
Is it right that a national credit team, at this level of loan, can override the view of experienced local management, who have met the client, know the area and the business? Yes in some cases, particularly larger more complex cases and of course local managers can get too close and cosy at times with clients. Local managers do have targets to, but they also get "caned" for bad debt which focuses their minds also.
I do think that the balance has swung too far and that local experienced and qualified bankers should be empowered more, especially at these modest levels in non complex sectors. In this case I know the local managers have done all they can to get this loan agreed and share my disappointment - it happens.
Anyway I placed the proposition immediately with another high street bank - I shall let you know who it is if they agree it! Which I hope they will for these excellent hardworking sound people who deserve to be supported.
Tuesday, 27 April 2010
More good news
Not in the office today - but nevertheless great to get e-mails on my iPhone from Lloyds that appointments have been booked in the case of each of the two referrals made yesterday to them. They receive from me, with the buyers full authorisation, a precis of the lending proposal along with financial information, so I know they must be looking to lend if they are putting an appointment in the diary expeditiously. The financial news today includes comment on Lloyds returning to profit although growth in the lending book is flat including that to SME's. Some would point to falling demand (namely borrowing to invest in ones business is being deferred to more certain economic periods, hopefully ahead), others to customers paying debt down in this tough financial climate and some to an overly cautious risk approach to lending. In any event I am pleased to see that locally Lloyds are hungry to lend and grow their lending book with good quality propositions, including the use of the Enterprise Finance Guarantee scheme where appropriate.
Monday, 26 April 2010
Finding the right Bankers
It is always interesting to see how different Bankers react to propositions put to them. Lending money has never been a science in my view but more of an art (mixed with technology these days - credit scoring etc!). The art is assessing character and risk. With the latter important element, some zoom in on the risks of the proposition first and foremost and cannot see past them to the positive opportunities that the proposition presents and how the risks can be acceptably mitigated. Others first and foremost seek to understand the full scope of the proposition and whilst acknowledging the risks they are keen to meet the people behind the proposal and try and find a way to mitigate those risks. Whilst the latter Banker may ultimately be unable to lend like the first overly risk conscious Banker, this is at least after fuller consideration. That's the Banker to deal with - not a "yes" man by any means, not any less experienced or qualified, just hungry to deal. At Ernest Wilsons many buyers require finance to purchase businesses and I have the pleasure of guiding them to Bankers like that - ones who are hungry to lend.
I came across one today though, not one of my usual contacts, who lacked the hunger to deal on a proposition of merit. Not to worry, easily placed with another Banker who will grasp with open arms and this initial frustration soon evaporated as later in the day Lloyds TSB again advised two more loans had been agreed for buyers very recently introduced. It is always a delight to speak to buyers who have had such news, as it is often a worrying time for them - will they or will they not be approved for a loan, feeling their life is on hold until this news is received!
I also enjoyed meeting a buyer today, who had done his homework with an excellent proposition and I am sure he will find the Banks queueing up to lend to him - yes that does happen!
I came across one today though, not one of my usual contacts, who lacked the hunger to deal on a proposition of merit. Not to worry, easily placed with another Banker who will grasp with open arms and this initial frustration soon evaporated as later in the day Lloyds TSB again advised two more loans had been agreed for buyers very recently introduced. It is always a delight to speak to buyers who have had such news, as it is often a worrying time for them - will they or will they not be approved for a loan, feeling their life is on hold until this news is received!
I also enjoyed meeting a buyer today, who had done his homework with an excellent proposition and I am sure he will find the Banks queueing up to lend to him - yes that does happen!
Sunday, 25 April 2010
The banks are lending!
Great start to my day Friday - two e-mails from Lloyds TSB Relationship Managers saying that they have agreed finance for two buyers one purchasing a Fish and Chip shop the other a Sub Post Office. I know there are many commentators who castigate the Banks for what seems a restricting of credit to small businesses but I have to say that is not my experience, either from my time at Lloyds or since leaving and introducing buyers to Lloyds and other Banks for finance. True the Banks are considering finance applications carefully, back to the "Captain Mannering" banking style of asking the common sense questions and checking thoroughly that the loan is affordable - but we would all be criticising them if they were lending without such scrutiny.
Today one of the Lending Managers at Barclays met a buyer to discuss a loan requirement which to be fair has its challenges! The will to try and "find a way" to help this excellent individual buy the business is so pleasing to see. The Banks do want to lend in my experience to the right person, running the right business, in the right location, with the right cash flow and profitability. Both these Banks are delighted to receive opportunities to lend and long may that continue. I appreciate that this is not the experience of everyone which is unfortunate indeed, but I look forward to helping many more buyers acquire the finance they need to buy the business of their dreams.
The afternoon brought a change in role as I started a series of interviews for a new "Telephone Business Sales Negotiator" as we are expanding our team at Ernest Wilsons. We are always on the look out for outstanding people.
Today one of the Lending Managers at Barclays met a buyer to discuss a loan requirement which to be fair has its challenges! The will to try and "find a way" to help this excellent individual buy the business is so pleasing to see. The Banks do want to lend in my experience to the right person, running the right business, in the right location, with the right cash flow and profitability. Both these Banks are delighted to receive opportunities to lend and long may that continue. I appreciate that this is not the experience of everyone which is unfortunate indeed, but I look forward to helping many more buyers acquire the finance they need to buy the business of their dreams.
The afternoon brought a change in role as I started a series of interviews for a new "Telephone Business Sales Negotiator" as we are expanding our team at Ernest Wilsons. We are always on the look out for outstanding people.
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