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Banks want risk info

Businesses can help themselves gain finance by properly assessing their risks.

Minter Ellison head of corporate commercial and banking John Paulsen said banks had needed detailed credit histories of clients before they could loan them money.

Mr Paulsen said the sort of risks a bank would want to analyse for a cash flow-reliant business included competitive, key personnel, Y2K, GST and legal and security risks.

“Key personnel risk addresses things such as measures to deal with the loss of a key staff member,” he said.

For businesses in the construction area risks include management, sales, environmental, key personnel and security.

“One of the big risks in this area, though, is construction risk,” Mr Paulsen said.

“That risk is based on the contractor’s record. Can the company have it built on time without cost overruns?

“When a company is going for finance it would be advised to have a document covering these risks.

“The more they analyse the risks of their industry the better.”

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