An old favourite of mine, the ‘Johari Window’ will be known to many as a tool to help people understand themselves and work better in a team. It is a perfect tool to understand what is going on between bankers and entrepreneurs when things go wrong.
I’m often asked this question, and by bankers in particular. I understand, I was a banker once myself and was equally mystified at the time.
The fact is that not only do intelligent and capable developers use brokers, but they are increasingly more inclined to do so. There are good reasons for this:
Developers do ‘developments’. In the process of that they have to wear many hats in a challenging world. They outsource what they can, where it can be done well and cost-effectively. Finding development funding is a task that can be outsourced.
It is no longer as easy as just going to your established main bank. Firstly many of them no longer do development finance, and where they do they have very selective policies. Although you may be an excellent developer with a long track record with the bank, if the development itself doesn’t meet their criteria you may not get the backing you need. Here’s my advice on what to do.
Taxpayer-owned Royal Bank of Scotland has sought to put an end to the storm that has surrounded its now-defunct Global Restructuring Group (GRG) by outlining a compensation scheme for the 12,000 small businesses that were customers of the division between 2008 and 2013.
Press coverage of the ‘RBS GRG’ (and ‘Lloyds BSU’) situation is confusing on the issue of conspiracies to bring businesses down, leaks about what actually happened and what the FCA are proposing in terms of compensation for SME’s affected.
Once upon a time Loan Agreements for most businesses below ‘Corporate level’ were straightforward documents, so actually drawing down the loan once agreed was relatively quick (subject to any additional security documentation). The years post ‘Credit Crunch’ revealed how bank’s documentation had become more complex with ‘Terms & Conditions’ documents (now separate chunky documents available by download) not easily read and digested by borrowers. Most relevant was the inclusion of ‘Covenants’ which would have previously only been included with loans for larger ‘Corporate’ borrowers.