Looking for bank recommendations...

LordNorbury

Hi folks,

I run a small business, we have been with AIB for the last 2 years since we started the business. We have never been in the red with them and we are lodging approximately 5-10K a week into our business bank account. We have no overdraft with them, no borrowings, we lodge cash & cheques daily, we are set up with iBB and take internet payments and also some clients pay us electronically. We have never had any issue with our account, never been in an unauthorised overdraft situation, and basically have always had money in the account and there is a lot of activity on the account.

We now wish to bring the business to the next level, and we want to borrow 20K to do this, and have run into major problems with our branch and in particular our branch manager. I now feel that these problems with our branch are irreconcilable and I feel that the culture within AIB at the moment is not conductive to helping small businesses. They will take your money all day long but once you look for something that involves risk, the answer is guaranteed to be a no.

I know I can go to the Credit Review Office, (it has been an ordeal just to get to the stage where our branch will take a loan application from us, I had to get the Credit Review Office involved, just to get the application form from the branch as they basically were frustrating our loan application), but my recent experience has been so bad with AIB, that I am no longer prepared to stay dealing with them, as they are useless in my view, they haven't the first or last clue about the needs of small business.

I've been through business success and then failure 2-3 times around 2006-2008, I feel now like I have finally got a business that works, and I am not prepared to risk the business success that I have now worked hard to achieve, by dealing with a bank manager who is unable to say "yes" to the smallest of requests.

Before I start dealing with another bank (and I will be changing our bank), I'm going to meet the Branch Manager and satisfy myself that I'm not dealing with another fool who will be hell bent on frustrating every request that is made for a loan or whatever.

On that note, would anyone have a recommendation for a bank within the Dublin area that is properly positioned to support small businesses? AIB and the culture at branch level, is simply not at the races when it comes to the needs of small business in my view.

pedronomix

Before you jump ship, you might be just unlucky with your particular AIB branch and it's useless manager. You have built a good track record with them and that will travel very well with you if you move your account to another branch. There is a lot of work and hassle in moving completely and there is so little difference between the banks no matter what the name over the door. Do a bit of research by asking around your business friends if they can recommend a good pro-SME AIB manager.. the bank branch can be anywhere and you can still lodge/draw locally.

Deano7

Would a large credit card at an into offer on interest rates be a better option? Seeing as ur borrowing 10% or less of T/O? Or maybe get suppliers to extend credit terms? More ways to skin a cat than 1!!

dbran

Deano7 wrote: »

Would a large credit card at an into offer on interest rates be a better option? Seeing as ur borrowing 10% or less of T/O? Or maybe get suppliers to extend credit terms? More ways to skin a cat than 1!!

Never ever use short term credit to finance long term goals such as business expansion.

The decision on whether or not to lend now concentrated in one central agency and is no longer handled by the individual branch. Thus the personal touch is no longer in play.

In any case, the manger of the bank seems to thing that you are not a good credit risk for some reason. Why do you think that this is? What business plan did you provide to them? Was it realistic or did it have a lot of gaps in it that did not stand up to scrutany? You need to figure this out as otherwise changing banks will not get you any closer to the finance that you need.

Have you tried crowd finance?

dbran

pedronomix

With an appropriate contact, banking is the same as all other business dealings in Ireland, it is who you know and a good contact can make all the difference. I spotted this which may open up a new line of approach to resolve your issues

AIB SME Line
1890 47 88 33
Mon-Fri 08.00-21.00
Sat 09.00-18.00

LordNorbury

dbran wrote: »

Never ever use short term credit to finance long term goals such as business expansion.

The decision on whether or not to lend now concentrated in one central agency and is no longer handled by the individual branch. Thus the personal touch is no longer in play.

In any case, the manger of the bank seems to thing that you are not a good credit risk for some reason. Why do you think that this is? What business plan did you provide to them? Was it realistic or did it have a lot of gaps in it that did not stand up to scrutany? You need to figure this out as otherwise changing banks will not get you any closer to the finance that you need.

Have you tried crowd finance?

dbran

Thanks for that dbran, I've since had a conversation with my BM yesterday and for once, actions have now been taken that will allow me to somewhat remedy matters. I was ready to close my account this week as I felt I was dealing with a situation that was beyond fixing, however since I had a discussion with my BM yesterday, I am cautiously more optimistic in relation to the future... I was advised before that if you want to grow a business, you need a bank manager that you can work with, and it was with this advice in mind, that I felt I needed to take some action such as change bank. But you are right, the decision making is centralised, but my problem was getting access to the middleman at the bank to discuss the best way to deal with simple issues like security and collateral, etc the standard term of the loan and size, etc, and this was resolved yesterday.

LordNorbury

pedronomix wrote: »

With an appropriate contact, banking is the same as all other business dealings in Ireland, it is who you know and a good contact can make all the difference. I spotted this which may open up a new line of approach to resolve your issues

AIB SME Line
1890 47 88 33
Mon-Fri 08.00-21.00
Sat 09.00-18.00

This is excellent advice Pedronomix, I got speaking to the right person yesterday and within a few minutes, the whole issue was resolved. Sadly it has taken me a month to get to this stage, but I'm feeling more positive about the situation now.

Deano7

dbran wrote: »

Never ever use short term credit to finance long term goals such as business expansion.

The decision on whether or not to lend now concentrated in one central agency and is no longer handled by the individual branch. Thus the personal touch is no longer in play.

In any case, the manger of the bank seems to thing that you are not a good credit risk for some reason. Why do you think that this is? What business plan did you provide to them? Was it realistic or did it have a lot of gaps in it that did not stand up to scrutany? You need to figure this out as otherwise changing banks will not get you any closer to the finance that you need.

Have you tried crowd finance?

dbran

Your missing 1 critical point, the amount of a loan required compared to the T/O. He said takings were between 5-10k per week therefore it should be 5% to 10% of T/O. While there is no mention of net profit I will assume its industry normal, why would he sign up to a loan agreement. An overdraft is what he needs assuming the business is profitable.

dbran

Deano7 wrote: »

Your missing 1 critical point, the amount of a loan required compared to the T/O. He said takings were between 5-10k per week therefore it should be 5% to 10% of T/O. While there is no mention of net profit I will assume its industry normal, why would he sign up to a loan agreement. An overdraft is what he needs assuming the business is profitable.

I hear what you are saying but the issue is cashflow. This is the most important part of running a business and the number one reason for its failure.

Bank overdrafts and trade creditors can be withdrawn overnight on a whim. Finance such as this should only be used to fund short term cash requirements such as a temporary dip in projected cash flows etc.

A 20k expansion seems to be long term and thus it should be funded with long term finance such as a loan. Otherwise you run the serious risk of running out of cash. If that happens it will not matter how profitable you are.

Regards

dbran