The Top 5 Tips Obtaining Corporate Banking Facilities

A typical question to business owner is “How can I get financing support from bank to my business”.  It takes time for the bank to understand your business and operations. Without adequate information, the Corporate Bank may reject your financing application according to internal credit policy and regulatory requirement. Instead of guessing the knack to obtain the approval, we provide you top 5 tips below for obtaining Corporate Banking Facilities:

(1) Transparent information

Corporate Bank requires Borrower to provide business information and operating data to assess and understand the business. The information includes the trade cycle, financial information, key management profile, sales and purchase documents, licenses or certification, and system data. All the information forms a big picture of the business of Borrower. Therefore, any vague information of single part would cause the question on the whole puzzle and ultimately the doubt of the information credibility.

(2) Well prepared financial information

The Corporate Bank deal with documents and numbers. One of the most important information being provided to Corporate Bank is financial information. The financial information includes your management account, audited report, bank statements, invoices sample, purchase order sample and/or account system login. Credit department staffs or your relationship manager would input your financial figures into internal system in order to generate a credit score which has substantial impact over your approval (Credit Scoring to be discussed in future). Staff from Corporate Bank will definitely work out each number shown on your documents to verify the authenticity of your financial performance. No worry, as long as you provided all information, the number of cash flow or balance sheet can definitely be verified. Therefore, before your application, get well prepared on the financial information in order to increase your successful rate of approval.

(3) Understand the risk appetite of bank

When you approach a Corporate Bank for financing, the risk appetite of the bank is a key. The risk appetite doesn’t mean that the size of the bank but the direction of business they are working for. Big banks have more resources and offering to Corporate customer with wider variety of credit options than smaller Corporate Bank. However, you will be rejected if your business or financing needs is not their target business given big Corporate Bank has rigid policy on business development. Comparatively, smaller Corporate Bank is more flexible on the business direction given that approval procedure is simple and fast compare with big Corporate Bank. As such, before approaching your Corporate Bank, you have to understand their recent appetite on target customer industry, turnover, banking products and financing tenor.

(4) Know your financing needs

Every owner or CFO desire the bank lend them money without restriction so called revolving loan. Corporate Bank has hundred type of Corporate Banking facilities to support business with various credit risk. Approval of credit facilities heavily rely on the result of credit risk assessment from the credit department. Thus, you must know what your financing needs is and apply for the right Corporate Banking facility. For example, your financing needs is advance payment from receivable for purchasing repayment, you should apply for export financing. The appropriate risk level application would substantially increase your probability of successful approval.

(5) Connect to the right person

Last but not the least, how could you know the above if you are not a sophisticate businessman using banking facility? You must connect to the right person from the bank. The person could be a Relationship Manager, Product Manager or a customer services in the right segment. Bank is a big organisation with well defined department to handle different function. Bigger bank is segmented into more layer than smaller bank. If you connected to the wrong party, you will be transferred couple of times before you reach the right person, or you never get it. Therefore, before you contact the Corporate Bank that you want to apply your credit facility, you better know how the bank’s business being segmented, whether it is classified by turnover or product or industry. As such, some businessman intends to get contact through referral from friends or business partner, some using FinTech/Tech platform such as FinMonster or Linkedin to search for the right bankers and some follow through the Corporate Bank’s instruction. There is no right or wrong as long as you get the right person accurately.

The above five tips are the practical tips for business owner or finance expertise to obtain Corporate Banking facilities. On top of that, business financing knowledge to deal with bank is also a must in order to increase your approval successful rate. Therefore, market intelligence and hard knowledge shall be the fundamental to make use of these tips. FinMonster will further elaborate this two topics in upcoming article.