As businesses look to take on funding for growth, expansion, or operational needs, accountants play a key role in helping to match them with a lending partner. This is why you’ll need to place yourself in their shoes, and consider what questions they may have and how you can best support them. To help you understand what your clients need from a financing partner we’ve put together the below as a useful starting point.
Understand their goals
To best support your clients with their lending needs, you’ll first need to have a clear understanding of where they are and what they want to achieve. Start by working with them to map out their short-term and long-term objectives. Then look at their plans for growth and how this matches with their longer-term objectives. Finally, you should bring it all together by looking at their financial situation and how their targets are going to be achieved. Here is where you can identify that a business loan is the best way to fund their plans, and this is when you can consider bringing in a trusted funding partner.
Analyse your client’s financial statements and projections
It’s great to start thinking about financial options early when a client is looking at their growth plans, but once you’ve decided that this would be a good option, you’ll need to look carefully at their financial situation together. You should complete a full analysis of your client’s financial statements, including income and cash flow statements as well as their balance sheet. Weigh their key financial ratios, such as profitability, liquidity, and solvency, to assess their financial health and repayment capacity. Additionally, you should look at their financial projections to see how large of a loan is needed and how they can cope with repayment timelines.
Assess their risk appetite and financial stability
Even though a lender won’t want to set repayment terms beyond a client’s means, there is still an element of risk when choosing a loan. With this in mind, you should evaluate your client’s risk tolerance and financial situation to find the right funding partner. In your financial projections, have you considered what a loss in income would mean for your client’s business? Are there any other financial commitments that they have that could impact their ability to make repayments?
Some clients may have a better tolerance for risk and can manage the commitment of a loan, and for others taking on a loan could be too much or not the right choice for now. But understanding their risk preferences will mean you can better advise them on funding options that fit their financial position.
Keep your communication open and transparent
Your clients will value your professional expertise, and keeping your lines of communication clear and open is essential when clients seek funding. These are big decisions that they will be making, and they’ll want to feel supported by you at all times, so make sure you are actively listening to their concerns, questions, and preferences. Clients will also value transparency at times like these, and they’ll want to know your guidance on things like when is the right time to take out a loan and how much you should ask for.
There is so much value accountants and advisors can add for clients when starting their lending journey. By anticipating all of the key areas they will have questions about and coming equipped with answers, you become a reliable resource who they will come to for trustworthy advice when they want to connect clients with the right funding partner. This approach will only strengthen your relationship and will help you better support them in the future.
Supporting you to support your clients: how OakNorth can help
We set up our partnerships scheme because we understand the huge value of having an informed connection when you make big decisions for your business. Our advice to you is to be this indispensable tool for your clients. You could do this by helping them with their funding application, specifically by compiling their requested accounts history or EBITDA data for example. You could even go the extra mile and attend meetings with a lender where you can be on hand to explain in more detail their financial situation and help to better present them to a lending partner when they’re ready for a loan.
So, if you’ve already had these conversations with your clients and are ready to connect them with a loan, make sure to reach out to your dedicated Account Manager. Or, if you’re an accountancy practice looking to become an OakNorth partner, you can sign up for our partnership programme.
by Gavin Fell, VP, Partnerships at OakNorth Bank
