How to get bankers to say ‘yes’ to your real estate funding requests
This month’s Real Estate Around London (REAL) networking event for property professionals drew quite a crowd. They came to hear NatWest’s John Gillen as he drew on his 35 years of banking experience to explain how to get a banker to say ‘yes’ to your funding requests.
John summarises his session below:
Banking is a heavily regulated industry in which banks have to lend responsibly and sustainably. Customers need to ensure the risk appetite and strategy they agree for their business matches the risk appetite of the lenders they might approach for finance. A bank’s risk appetite will determine what it sees as an acceptable lending proposal.
There are three vital questions you should always ask your bank manager when trying to obtain funding:
- What, in your eyes, is my business strategy and which of the risks inherent in my strategy do you think are my biggest concerns?
- How much will you lend to me to support my business strategy now and in the future? How can you help me manage the risks that concern me?
- What is your experience (as my Relationship Manager) in the real estate sector? What is your bank’s real estate finance risk appetite and real estate strategy?
The answers to these questions will help you understand the culture of the bank and the people in it. It will also allow you to form a view on the type of approach your lender might take towards you if (when) there is a downturn within the real estate sector.
REAL is a property networking group for developers, estate and letting agents, building engineers, architects, building and construction professionals, and investors. The events are sponsored and hosted by WMT Chartered Accountants, Lambert Smith Hampton Property Consultants and Sherrards Solicitors.
If you are interested in attending future REAL events please contact Charlie Read