It is very easy to feel content and just settle for what you have. For example, when owning your own home there are certain utilities, such as electricity, television, telephone and broadband which you need and therefore pay a monthly fee for. Often when a monthly payment plan is arranged, and all of the contractual agreements are put in place, the typical scenario is to just let them run in the background. Even if service levels drop slightly and renewal fees increase, the tendency is to still remain with the current provider because it is easy and swapping can be a hassle.
The same scenario can occur within a business. Clearly, the most important factor is to generate revenue, so a company must be very sales focussed. However, in the same instance the business will have expenditure and costs that need to be accounted for and monitored. Often suppliers will be sourced, agreements put in place and providing the business gets what they need, when they need it, they will just leave a rolling contract in place.
Let’s break this down further and focus solely on the provision of business finance. There are many reasons why business finance is needed; it could be for boosting cashflow, purchasing equipment, increasing headcount, or investing in property. When a business finance solution is sourced and agreed those involved can relax and leave the contract to run with little to no intervention.
However, if you leave the finance solution in place for a set period, how can you be confident that what you are being provided continues to match the exact needs of your business?
We have seen first-hand how important it is to keep an eye on your business finances and something which is often overlooked is lender fatigue. In essence, the lender has become stagnant in what they provide and make it more and more difficult for an existing customer to access new financial products. One most recent case explained to us was by a company using stocking finance to purchase new items and they were looking to extend the facility. Their existing provider was making them jump through all sorts of hoops and eventually it resulted in the end of the business relationship.
Lender fatigue is very apparent with financial agreements that have been established for over 24 months. Therefore, our advice is to make sure you regularly review your existing financial commitments and don’t be frightened to change, it will often be a simpler process than looking for new options with your existing lender.
If you are worried about lender fatigue and would like to explore new finance options, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.
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