Atle Crowe-Maxwell

“The Carnell Report into banking practices should provide small business owners with a fairer, more equal relationship with their banks, if changes are accepted. The mooted changes would give clear timeframes on changing the terms and conditions of a banking arrangement.

“Borrowers/business owners will only benefit if they obtain proper advice to help them take advantage of the proposed changes,” said Atle Crowe-Maxwell, Director, Omniwealth Business Advisory.

Omniwealth has six tips to help improve the relationship between borrower and their bank even before Carnell report becomes law:

1. Covenant reporting

Almost all loans are subject to covenants put in place by the bank to monitor a business’ performance regarding servicing a loan. These covenants may be financial (e.g. interest cover or enterprise value) or non-financial (e.g. regular financial reporting, maintaining appropriate levels of insurance).

It is important that these covenants are both maintained and reported to the bank periodically. A business should ensure that its financial reporting has regard to these covenants and that they are reported in a timely fashion and in a format that suits the bank.

2. Ensure the bank has a good understanding of your business

Present your strategic plan to your bank and educate them about your industry, your customers and suppliers, and any risks that you foresee in your market. Your bank may be able to help you and provide valuable input where they have many clients in your industry/market.

3. Provide realistic and credible financial information

Your budgets and forecasts should be reflective of what is likely to happen in your business, rather than your ambitious or “stretch” targets. Painting an overly optimistic picture of the future of your business may lead to a loss of credibility with your bank if those targets aren’t achieved. Under-promising and over-delivering will help you build trust and your relationship with your bank.

4. Arrange regular meetings with the bank

Be proactive and offer to meet with the bank on a quarterly basis. Present financial position and advise the bank how you are tracking against budget. Be honest and provide your bank with all information, both good and bad.

Explain to your bank how you propose to deal with any adverse variances or difficulties, and where possible, seek the bank’s advice as to how they might help you. By continually providing the bank with relevant and timely information, their knowledge of the business and how it is conducted will strengthen.

5. Get to know the team of bankers

Given the large number of clients that an individual relationship banker may manage, it can be difficult to have a sole point of contact within a bank. Make sure to build a relationship with a team at the bank. That way, if the primary banker is unavailable, or moves on to another part of the bank, there are still valuable contacts involved who understand the business.

6. Borrowers: Do what you say you are going to do

The key to building trust with the bank, and to ensure that the relationship is as strong as possible, is credibility. If an action has been promised, it is very important to deliver on those promises or at least provide them with an explanation of why the action has not occurred and communicate a plan to remedy the situation.

Maintain good bank relations

Omniwealth Banking Advisory believes that bank borrowers should treat the tasks involved in preparing and maintaining good bank relations as a business activity. Carnell changes or not, banks want more information from clients and this includes taking care and seeking assistance where required when applying for or reviewing funding requests.
Touch points with the bank (that may benefit from borrowers gaining specialist expertise) include:

• Ongoing covenant and financial reporting
• Facilitate and prepare information for presentations to banks
• Funding mix/debt structure reviews
• Security reviews
• Assessment of appropriate debt levels
• Investigating Accountant Reports

By Atle Crowe-Maxwell, Director

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Atle Crowe-Maxwell

The Carnell Inquiry into small business loans recommends changes to how banks deal with small business customers.

“In the event that the changes are adopted, banks will have to communicate much further in advance to their customers about changes in the covenants or other criteria around existing loans or facilities that rollover regularly.

“The proposed rules should better protect borrowers than in the past because they will have more time (depending on style of loan) to respond to their bank about the changes required. With the right assistance, they can bring forward evidence to show the banks their ability to service facilities and/or provide more security.

“The establishment of the Omniwealth Advisory Services brings together the existing SME advisory services plus specialist reconstruction and business recovery expertise to assist businesses in navigating new bank lending practices. We see the advisory team being able to act more like advocates for our clients with the banks because the banks will be required to release much more information as to their concerns about the client’s ability to meet their financial liabilities.

“Where a bank has concerns over valuations of property and other assets that support loan facilities, these concerns, often created by a computer-generated alert within the bank or the results of an Investigating Accountant’s Reports ordered by the bank, will be communicated in a timely way to clients so they can respond,” said Atle Crowe-Maxwell, Director, Omniwealth Advisory Services.

The post Omniwealth Advisory Services launched to assist clients work smarter with their banks with proposed July 2017 rule changes appeared first on AdviserVoice.

Atle has joined to build a business advisory/succession planning service across the group. Previously he was with BDO as a corporate recovery partner.

“The synergies between an accounting practice and a financial planning practice all working together offers the right mix to assist businesses as they grow and mature. Owners need advice around the best strategy and structure for the business to weather the current business climate and succeed*,” Atle Crowe-Maxwell, Director, Omniwealth Business Advisory.

“While estate planning has become a growth area for financial planners, succession planning has been overlooked or misunderstood by a lot of professionals advising SMEs. The progressive retirement of baby boomers has brought the question of succession to centre stage for many companies and their family owner members.

“Omniwealth now has a deeper expertise in-house to assist with planning succession strategies. We believe the first need in succession thinking is to assist clients develop the right strategy and the best structure before considering tax or funding matters,” said Mr Crowe-Maxwell.

‘We are delighted that Atle has joined Omniwealth. His appointment will bring an extra dimension to our service offering. Omniwealth finds that many of our small business clients want the skills of a big firm with key services available in one place at one time so that they can access the collective IP that all of our advisers have amassed about them to assist them,” said Matt Kidd, Managing Director of Omniwealth.

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