Bank restructuring – what should farmers do if they are not happy with their new relationship

More banks are restructuring their businesses to cut costs. This is affecting farmers and rural businesses, with many losing their local bank manager or being moved to a remote telephone banking relationship often with teams with little or no understanding of farming.

We’ve written before about why banks are reorganising and the effect this can have on farming clients. If a farmer isn’t happy with their bank’s change of relationship or terms they can review their options and look at alternative banks and lenders.

The banking industry has put rules in place to make it much easier for a customer to move banks and the process is very simple and doesn’t take too much time.

Our tips for farmers looking to change banks

Looking for a new bank or lender, and there are many to choose from, can mean a fresh start. Here are some tips on what farmers can do:

• Don’t be afraid to voice an opinion. Your bank may be able to, or prefer to, offer you a different relationship rather than lose a customer.
• Explore the high street, rural lender, alternative lender and private banking options. There is more choice than there was five or ten years ago and different banks or lenders will suit different business circumstances. Read our blog on the options and the margins you could expect to achieve if your proposition is positioned effectively.
• Examine each bank and lender carefully and decide if they really are the bank for you.

• Ask yourself: Does the bank have a good reputation in your area? Does the bank have experienced field staff? Does the bank have a local branch network in your area, and is there a good chance it will remain? Does the bank offer the range of banking services you need? Does your Bank employ a Bank Manager who understands you and your business?

• A review of your options by an independent adviser, such as R&BS, could prove an advantage. You may save yourself a huge amount of time and you could also ease cash flow or present new investment opportunities by putting your banking arrangements into a more suitable structure.

Opportunity often comes out of any change, and a change of bank also gives you the chance to review your whole banking and borrowing arrangements. For example, changing your repayment terms or how much borrowing is apportioned between your overdraft and loans and mortgages could be beneficial for the business.

The change also brings an opportunity to review what and how much security is pledged. There will be bank fees, valuation and legal costs in changing security to a new bank – so it’s crucial to make the right decision the first time. No-one wants to be faced with the cost and upheaval of moving banks for a second time.

How we can help

At Rural and Business Specialists our experienced team work closely with the agricultural and rural teams of the high street banks, challenger banks, most private banks and rural and alternative lenders. We know their policies, know their staff on the ground and can assist you in making the right switching choice that is best for you and your businesses.