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Lending Conditions have tightened! - 14 November 2016

In my September edition I indicated that the new LVR criteria was starting to impact and that banks would start to tighten their lending criteria.


Well folks, it is official - they have!


On the back of this credit tightening we have recently picked up some very good business. These have been in a variety of industries such as Transport, Clothing, Business Services and Manufacturing and we have been able to support them with a mix of Invoice Finance Facilities and Import Facilities. They are located across the country and have been split over the Business Banking and the Commercial Banking areas. So it seems that this is a nationwide issue across the SME sector.  


These were situations where the client’s bankers only a few months ago would have looked to support these clients and “made it work” even though their serviceability and equity may have been marginal.


It did come as a bit of a surprise to them and their advisors that their bankers chose not to assist.


The one common theme was that all of these clients had good receivables ledgers that the banks were not valuing which meant that we were able to provide the additional funding line that they were requiring to support their cashflow.


So what now?


I would suggest that more of your clients will start to hear some of the same responses that I have been hearing from Bankers.


“We are only looking for the well secured businesses that have good equity and profitability that we can get a good return from”.


As we know, not all businesses can be like this. So if any of your B2B clients have been told by their bank that they can not assist then just give Lock Finance a call and see whether our cashflow facilities can.

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