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Understanding the role of your bank

Every business owner understands the need for a bank account to facilitate payments and receipts. But banks can help your firm in many other ways too from banking services such as overdrafts and loans, as well as services including insurance and pensions.

You need to ensure you choose the right bank for you and your business. We have constantly heard about the breakdown in relationships between banks and small businesses over the past year. You need to ensure that you can feel confident turning to the bank for finance if you want to expand, or even should something go wrong. So seek advice and recommendations from professionals, such as business mentors, your local enterprise councillors, as well as small businesses in your sector.

Most small businesses will at some point want to approach the bank for a loan or overdraft. While you expect and deserve an efficient and helpful service from your bank, it also has expectations from you.

Make sure you always go to the bank with a detailed business plan that not only covers the near future, but long term as well, so the bank can see how you expect your business to grow.

And keep the bank informed about what is going on with your company, particularly if you have a loan. The bank is far more likely to respond in a positive way, especially if you want to borrow more money.

Lastly, watch out for hidden charges. People new to business are often surprised by the range of charges imposed on them by the bank, after being used to free personal banking for so long.

The main thing to do is to research, seek advice and keep in contact with your bank manager so you maintain a fruitful relationship.

For more information about the Federation of Small Businesses go to

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