Traditionally, most businesses tend to stay with the same business bank provider.
Simple complacency and the perceived ‘hassle factor’ has made business borrowers reluctant to make the switch. This is even despite the fact that many traditional banks have exited or looked to reduce their lending in to the SME market. In addition, many SME have found it increasingly difficult to meet the requirements of the big banks and therefore sticking with the “status quo” has become the default position.
However, the lending landscape has materially changed over the recent years with numerous lenders now in the market. Married to that is the good news that there is almost no hassle in switching nowadays and you could save your business a lot of money by negotiating more flexible lending terms. So switching no longer has to be a painful experience and there can be significant advantages in changing lender.
- Presence and Performance – more local or specialist focussed lenders might understand your business requirements better than your current bank with greater knowledge of market conditions and business sectors and able to offer a more focussed individual, personalised customer service with greater access to personnel who are recognise your requirements, pressures and borrowing needs;
- Pricing – they could offer more attractive interest rates or lower charges, but equally as importantly consistent and simple pricing to provide clarity and remove complexity and confusion;
- Products – many customers are disappointed with bank’s lack of willingness or ability to customise their products and services for their individual needs and simply offering off the shelf products. You want innovative, quality products that dovetail with your business requirements. Newer lenders unburdened by established institutional rigidity can be more flexible and adaptable and so can create more tailored financial product and support services for your business;
- Process – IT developments and lack of established traditional platforms also allows newer lenders to have developed sophisticated digital platforms that make switching quicker, simpler and less intensive as well as supplying on-line and interactive banking services and systems which can enhance your business operation and management.
Of course, in addition on switching you might also get certain the perks and bonuses of becoming a new customer, as well as new customer benefits such as introductory periods with no or reduced fees and interests rates being applied.
However, whilst it is always nice to get a “Brucie bonus” the most significant determining factor in deciding to switch is ensuring that the new lender and its services are the best fit for you and your business. You may need to strike a balance between the attractiveness of potential immediate financial benefit against the importance of establishing long-term banking relationships. The ultimate goal is to have banking relationships that permit and allow you to achieve your long-term strategic objectives for your business. So research the market thoroughly and understand what each one is offering and compare them. Look at lender reviews so you know more about them than just what their telling you – after all, these are the people with whom you are trusting your finances so the more you know about them the better.
We can help you identify the lender most suitable for you and assist in getting you access to them. To discuss further please contact Craig Darling by email: email@example.com or by phone: 0141 530 2044/07841 920 467