Should I see my banker now or wait until things are more serious?

Dear Aunty B,

I sell a range of niche food products to large supermarket chains, and prices have gone up across the board, including packaging and transport.

I am going to need a bigger loan next year as my business is in strife, and if things continue to be bad, I will run out of cash.

My question is should I see my banker now or wait until things are more serious?

Jennifer B,

Dear Jennifer,

Are you nuts? Things are serious! Make an appointment with your banker this minute for a few weeks away and then get very well prepared!

While there is as much competition in the market now to loan to good quality businesses, those in trouble can expect to pay a very high interest rate (12% plus).

And there is another very good reason to see your banker now. A banker just told me that he was at bankers’ drinks the other night and the talk hovered around some of the smaller troubled businesses they are “looking after”.

One banker said: “We’re looking at them one by one at the moment, but what happens if we get a tidal wave?” To which a more experienced banker replied: “We won’t be arsed looking at them one by one. We won’t have the time, so we’ll just appoint receivers.”

This also happened in the early 1990s and it was not a pretty sight. Now a lot has changed since then, including better work out plans and regulations. However if you think your banker is busy now, try him or her next year!

Good luck!

Your Aunty B.

Aunty B - Your problems answered by SmartCompany's business bitch

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