‘They don’t respond with great enthusiasm to a boring, badly prepared business plan delivered by a faceless client. If you want special attention you need to do something special.’
“Do you have any tips for me about how I can secure finance?” said the voice at the end of the phone – probably the tenth call I’d had over the past few weeks about the same question. It’s become so much tougher to get agricultural finance in South Africa. Land restitution/reform and the collapse of the Land Bank have seen to that.
This caller was a farmer from Mpumalanga wanting to expand his potato production. His bank was prepared to provide lease finance for additional moveable equipment, but not the money needed to prepare and plant additional land. unbonded property was available as security but as it was under land claim, the bank wouldn’t look at it.
So what next? He claimed he had a secure buyer for the product, which immediately created an opportunity to secure finance from this source, but before explored that possibility with him any further, shared a few thoughts on wooing his existing bank.
Do you remember when the most important person in town was the magistrate, the dominee and the bank manager? Towns were smaller then, often with only one bank, but that sort of intimacy is history.
Today banks are universally maligned and it’s seldom a pleasure dealing with them. Growth, the never-ending battle to compete and corporatisation have disempowered local bank managers and employees. They no longer have the authority to assess financing needs and make decisions about the creditworthiness of clients. In processing loan applications they are tasked with collecting data on predesigned templates which go to faceless committees that make the decisions.
But despite our deep aversion to dealing with banks, we sadly cannot live without them and whatever you might think, our banks are still the envy of the developing world. They continue to play a vital role in seeing farmers through their seasonal cash flow dips, apart from other short and long-term loans without which little expansion would take place. And surprising as it may sound, bankers are human. They, just like you, don’t respond with great enthusiasm to boring, badly prepared business plans delivered by faceless clients. If you want special attention you need to do something special and here are some tips to get them on your side: on’t contact your bank only when you’re in trouble. Keep the key management staff regularly informed about your business.
Give management a feel for the human side of your enterprise. Provide a story or two about the personal successes of some of your staff. etter still, invite them to the farm. Show them the impact of the loan.
If the manager is a new face, make sure he or she knows about your history with the bank. Y our loan application must be professionally prepared and obviously make business sense. Just as they need to sell their services to you, you need to market your enterprise to them. You need to differentiate yourself and your business from the many others approaching them. – Peter Hughes ([email protected] or call (013) 745 7303). |fw
