Coming into effect on 1 January 2008 it introduces changes in the relationship between banks and companies. Changes which may result in risks but also opportunities:
- the risk is that many SMBs will see their access to sources of funding decrease if not vanish all together;
- there is however the opportunity to create more stable and lasting relationships between banks and companies, which will result in more innovative financial products.
In order to mitigate risk and take advantage of new opportunities we need to see a new style of communication between lenders and businesses.
It is in the company's interest to make the bank see what the company has to offer as well as the long-term value of the business, in order to prevent the bank from focusing only on likelihood of the loan being repaid, which will be assessed based on the saleability of assets or the credit rating of guarantors.
In actual fact few SMBs have access to staff with the skills required to communicate effectively with banking institutions. We can therefore see how deficiency in this area may prevent the company from flourishing in the future even if the business model itself has great potential.