How a banker might assess a business requesting funding for a transaction

Continuing one of the MD2MD’s meeting themes of “how businesses are viewed by external financial and commercial professionals”, we were delighted to welcome Steve Bateman, Senior Business Development Manager of The Co-operative Bank Corporate Banking to talk to the group of business owners and managing directors about ‘how a banker might assess a lending proposition’.

Steve started by introducing “CAMPARI & ICE” to the members; an acronym the bank use when assessing applications.

C    character
A    ability
M    means
P    purpose
A    amount
R    repayment
I      insurance


I     interest
C   commission
E    extras

He explained in some detail how he might go about considering the business risks; not only looking at a company’s financial statements, but also looking at its market position and management. A bank will also consider the industry as a whole; its growth, decline, market share and the clients strategic positioning within that.

When assessing financial statements, amongst others the focus will be on revenues, costs and profits for margin trends, cash-flow for any pressure signs, assets and their potential value and any current debts or liabilities.

Steve emphasised that there is no single measure to show whether a company is a good credit risk or not. It is important for lenders to consider non-financial traits as much as financials and that common sense questioning and reasoning is essential; as is customer transparency.

He did, however, point out that presentation can add or detract from a borrowing request and as a result some companies use professional advisors.

The group came away from the meeting with a greater understanding of banks and what they look for, and their basic credit assessments.

Bob Bradley

Bob is a specialist in running high value added service businesses, having run five such businesses as General Manager, Managing Director or Chief Executive. His last employed role was as Chief Executive of a £16M, 200 person family owned business having previously been Chief Executive of an AIM listed company for which he raised £5M funding and which he grew from £4M to £12M in three years through two acquisitions and organic growth, and a corporate PLC subsidiary where he was Managing Director responsible for delivering £10M profit on £45M turnover through 450 staff.

Bob is now following a portfolio career providing entrepreneurial business leaders with mentoring and coaching around business leadership, business growth, merger integration and exit planning.

Core to his portfolio is MD2MD. Having experienced for himself the value of having a strong sounding board of fellow Managing Directors he founded MD2MD in 2004 to provide groups of business leaders with a confidential environment within which they can support and challenge each other to raise their game as leaders and by doing so improve the success of their organisation.

More about Bob

MD2MD membership

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