Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsContinuing RelationshipsBanking is essentially a hands-on type ofactivity. A good bank manager keeps awatchful eye over the businesses under his orher control, both evaluating the risks involvedand looking for new business opportunities.There are advantages in this for a business thatis well run. Besides maintaining an overviewthat is designed to protect the bank, thebank manager is also a salesman with salestargets. A business that is clearly performingHINTKeeping your bank wellinformed of your businessactivities and performancewill ensure that they areready to respond to anyadditional requestwell can therefore expect to be able to obtain increased bank assistance to matchany growth in requirements.For the relationship with the bank to develop well, there is one requirementthat must be observed: there must be an open approach that involves keepingthe bank properly informed. Any tendency to inform the good side and leavethe bad side unmentioned should be avoided. Any downward turn in eventsshould be discussed with the bank manager as soon as it is known, not whenthe overdraft limit is exceeded or loan repayments are late. Remember, whilethe bank is providing facilities, they are effectively in partnership with yourbusiness.One of the advantages of a well-developed banking relationship is that theexperienced bank manager can assume some of the role of an unpaid fi nancialadviser. Bank managers have experience with many types of businesses andcan give fair advice, since they are not closely involved in the business.TIPBank managers are often working with other businesses in similarindustries and can be a useful source of information for your business154chapter 7-13 p79-181 Eng.indd 1548/15/11 5:03:08 PM