Banks Make Or Break Your Dreams

11/06/2009 by info.

The character Captain Mainwaring in Dad’s Army showed how bank managers were once upon a time a respected authority; everyone believed what he said (even though most of the time he was wrong). This created farcical outcomes we enjoyed laughing along with.

Banks however are not the Cassandra’s of this world and do make mistakes, which has lead to a great loss of authority, almost bankrupting the country. There is however one area where a banks authority is still regarded as being paramount and that is the bank status report.

There are two aspects to buying a leasehold business, the first one is to reach an agreement with the owner of the business, and the second is to persuade the landlord of the property that you are able to continue to pay the rent. So a bank status report and trade references are required to prove that you are likely to be a good tenant.

The most important of these is the banks opinion on whether the buyer can meet the rent payment, now this opinion could be totally wrong, but is an overriding make or break piece of paper for a buyers plans.

This is where a first time buyer often becomes unstuck, as they have not informed their bank about their plans. So when the status report is returned often the bank reports that “ they cannot speak for your figures”. Such a report of course is unacceptable to a landlord.

A seasoned business owner with a track record with the bank should never fall foul of banks lack of knowledge of them. A first time buyer should realise that regardless of whether they think they need the support of their bank manager to buy a leasehold business, they have to accept that they need his blessing.

Whether of not you make friends with your bank still has a bearing on your goals and dreams.

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