Financial eggs in one basket
Easter is synonymous with eggs, and as the saying goes – Don’t put all your eggs in one basket – unless they are chocolate, and it is my basket, in which case, go ahead.
Joking aside, a lot of these old sayings are still relevant today, and this is a good one to bear in mind if you are in business, especially when it comes to finance for your business.
Let’s face it: You wouldn’t want to rely on a single supplier or customer for your business, or on a single customer if possible. If you do, then you know what the potential problems can be.
So why do many business owners think it is preferable to have all their borrowings in one place, UK Bank? Perhaps it’s because your Bank was the one-stop, go-to place for all your financial needs, but times have moved on.
As a former bank manager, I would now encourage clients to spread their borrowing requirements across multiple providers.
I have often seen clients with multiple facilities from a single provider, such as an overdraft, a loan, invoice finance, and an asset finance facility. They have a temporary cash-flow issue, and a loan payment is missed. The provider then secures its position by restricting access to other facilities, exacerbating the situation.
There is a very good chance that had the facilities been split between various providers, the restrictive element would not have happened, and indeed, one of the other providers may have flexed their facilities to overcome the problem.
So take it from me, Honest John, someone who has worked in the finance market for over 45 years: Don’t put all your eggs in one basket. If you need help restructuring your borrowing, call or email me.
Finally, I will leave you with another sage piece of advice my Mother gave: Don’t eat all that chocolate at once; you will be sick.
Happy Easter
How to Get Involved
Got a finance question? Ask Honest John!
Email me at askhonestjohn@sterlingcommercialfinance.co.uk, and I’ll do my best to provide answers in a way that makes sense. Expect straight talk, a bit of humour, and insights you won’t find in a Google search.
So, ask away with your question—I’m ready!
Welcome to Ask Honest John.
