Many business owners are reluctant to negotiate or renegotiate their bank fees with bank officers. This is probably due to the fact that most of them believe that the rates charged are not negotiable. However, this is an erroneous view since it is possible to move to the negotiation stage. It is certainly a more complicated process, especially for individuals, but it is still quite accessible even for professionals.
Working with multiple banks
In business, it is safer to work with at least two banks. The advantage is that you can establish an environment conducive to negotiating bank fees. It is also an essential safety margin for the company if relations with one bank become strained or deteriorate. With two banks, it is possible to make comparisons and to choose the best tariff offer for certain important operations: request for credit or lines of credit, operations towards foreign countries, overdraft line, amount of the bank charges… To decide with which banks to work, one can resort to the online comparison of professional bank accounts.
When to negotiate?
Bank fees can be a significant expense for a business. Negotiation is an important step in reducing them. It is easier to curry favor with bankers when negotiations are done at the time of account creation. However, it is also possible to request rate revisions at any time. It is important to choose the right time to start negotiations. The account must therefore be active, i.e., it must show more or less significant and frequent movements. Other documents can be used to support the process: activity report, budget forecast, outlook, financial statements. It is best to wait until the end of at least one fiscal year to begin negotiations.
Rely on solid documents
The bank assesses the risks before making decisions. The more they know about the business, the more successful the negotiations will be. It is important to know that the banker relies on the “financial” health of the company to grant a rate revision. It is for this reason that the head of the company or manager must be able to demonstrate the company’s performance in all areas (activities, resources, development prospects, profitability). The establishment of financial documents is therefore essential. Is it also necessary to demonstrate that bank charges are a burden on the company’s cash flow? The ratio of bank charges to sales is an important indicator for the banker.