It’s more than 20 years since I stepped into the banking world with Royal Bank of Scotland.
Over those two decades things have changed dramatically within traditional banking, not helped of course by the crisis.
I know people tend to look back at the ‘good old days’ through rose tinted glasses but things did seem to be better in those days.
There is loads of anecdotal evidence about the bank manager of the local branch being very much part of the community, with plenty of business being done in the local pub or on the golf course. People talk of lending decisions being made via a handshake based on whether you were trustworthy and how you behaved.
We all know it wasn’t quite like that. There’d still have to be a business plan and they’d need to see some accounts. But the type of character you were also had some bearing. And there certainly wasn’t the faceless ‘computer says no’ response. Mind you, there weren’t many computers about!
Although technology has advanced massively since then, you don’t have to get rid of all those things we look back on with fondness.
For example, at Reward Finance we really like to get to know people. We’ll visit the businesses, take a look at the operations, see how they are managed, discuss the plans for the future and find out how the requested funding can help the business.
Naturally we look at the accounts but, unlike traditional banks, we are prepared to take a punt on a business with potential which can benefit from an injection of cash.
Banks are also highly unlikely to entertain financing a business proposition unless they can demonstrate experience within the sector. Instead they’d probably ask them to come back when they have the experience and demonstrate a good track record, presenting a ‘Catch 22’ situation.
Don’t get me wrong; I’m not ‘bank bashing’, after all many of my friends are still working in the traditional sector. Instead, I firmly believe there is a place for both types of funders.
While we can help turn businesses around or help them react to a situation by providing the funds just when they need them, which is usually within a few days, banks need a longer time to go through all the decision-making processes which could take weeks. As we all know, when it comes to cash flow injection even a week’s delay can prove to be too late.
Once the business has been turned around, or moved to the next phase of growth, the high street lender can step in and provide the traditional type of lending over the longer term.
In the meantime, as people buy from people, we’ll continue to practice the traditional methods of working backed up with the latest technology. After all, we don’t just provide much needed cash, we become a part of their team, because their success ensures our success.