19. Banking and Finance Neatness

Clean facilities, clear charges and an audit trail that bankers trust

Problem Statement

Many owners treat banking as something that just sits in the background. The overdraft works, loan payments go out, merchant fees land each month. No one looks too closely at securities, guarantees or covenants until a buyer or their banker starts asking detailed questions.

If facilities, directors’ guarantees and securities are scattered or out of date, the deal slows. Buyers worry about hidden charges on assets, surprise consents required from the bank or old guarantees that still have your name on them years after settlement. Untidy banking can turn a straightforward transaction into a negotiation about risk rather than value.

What An Owner Might Say

“Our bank has been with us for years. I sign what they send. I could not quickly list every facility and security if you asked me.”

“There are a couple of old loans that we refinanced. I assume the old securities were cleaned up, but I have never checked.”

“The company owes the bank on paper, although half the guarantees are personal. I really do not want to be on the hook after I sell.”

Why It Happens

Most SME banking grows in bursts. You open an account when you start, then add an overdraft, a term loan for gear, maybe property lending, trade facilities, credit cards and merchant services. Each step produces its own documents, charges and guarantees. The paperwork gets filed, then forgotten.

Owners focus on price and approval, not structure. You remember the interest rate and monthly payment much more clearly than the security schedule. Over time you might refinance, shift property, change entities or repay loans, yet no one completes the tidy loop with the bank and the Companies Office.

Responsibility is usually shared between you, the accountant and the bank manager. Everyone assumes someone else has the full picture. Until due diligence arrives there is little pressure to pull all the threads together.

What To Do About It

Treat your banking like a core asset rather than a utility. Begin with a full inventory of facilities. List every overdraft, term loan, property facility, equipment loan, credit card, bank guarantee, merchant facility and standby line. For each one note limit, balance, interest basis, maturity date, covenants and which entity is the borrower.

Next, map the security picture. Pull the latest security schedules from the bank plus searches from the Companies Office register of charges. Match each charge to a facility or group of facilities. Note which assets are secured, which guarantees apply, whose names appear and whether any charges relate to loans that have already been repaid.

Identify orphan securities. These are charges, GSA registrations or guarantees that no longer serve a live facility. Work with your bank to get formal releases, then tidy the public record. Buyers love seeing proof that you have already done this hard work. It signals discipline, not drama.

Look hard at personal guarantees. Record which ones you have given, for which facilities, and whether they are limited or unlimited. Decide which guarantees must be released at settlement, which might be replaced by buyer guarantees and how that will be documented. No owner wants to discover years later that a default in a business they no longer own can still reach into their personal life.

Check covenants against your current numbers. Many facilities come with conditions around interest cover, leverage or cashflow. Confirm that your recent performance sits comfortably inside those limits. If you have had breaches in the past, gather the correspondence that shows how they were managed. Buyers prefer an honest story over a surprise in the banker’s file.

Finally, connect banking to your broader structure. Make sure borrower names match the entities a buyer will acquire. Where lending currently sits in a vehicle that will not form part of the sale, plan how that will be repaid, refinanced or carved out. Clean lines here avoid last minute legal gymnastics.

How To Keep The Momentum

Once you have a neat banking pack, keep it current. Update the facility list whenever you add, change or repay a loan. When you sign new security, file it with the existing set and record which facilities it supports. Each year, run a quick check that statements, covenants and your own internal schedule still line up.

Build banking into your regular planning rhythm. At least once a year, sit down with your banker to discuss upcoming capital needs, exit timing, property changes and any desire to simplify facilities. A bank that understands your exit horizon will usually be more cooperative when it is time to release securities or consent to a change of ownership.

Weave banking into your data room story. Prepare a short summary that covers facilities, securities, guarantees, covenants and recent compliance. Attach key documents such as facility letters, security schedules and any waiver letters. The aim is for a buyer’s banker to scan the pack, nod, then move on to the next topic.

As you get closer to sale, decide which facilities should be repaid at settlement, which the buyer might assume and how that will appear in the sale and purchase agreement. Translating this into a simple completion funds flow helps lawyers, bankers and buyers trust that the numbers really do join up.

Golden Nugget

“Neat banking tells buyers that the people steering the business have been awake at the wheel, not just tapping the card and hoping.”

How RegenerationHQ can help

RegenerationHQ supports NZ SME owners to exit well, lead better and build business value, with a strong focus on making the whole exit picture more coherent for buyers, banks and advisers. Banking neatness sits squarely in that space.

Support can begin with a practical review of your facilities, securities, guarantees and covenants, viewed through an exit lens rather than only as day to day funding. From there, RegenerationHQ can help you prioritise which facilities to simplify, how to prepare banker friendly summaries and how to integrate those decisions into a wider Exit Prep Programme that covers financial readiness, structure, leadership and growth story.

The result is a business that arrives at market with banking and finance already tidy. Facilities are clear, charges are mapped, personal guarantees are understood and the audit trail is strong enough that bankers trust it. That confidence makes it easier for a buyer to secure their own funding and to pay fair value for what you have built.

If you want a steady guide beside you while you get ready for one of the biggest decisions of your working life, RegenerationHQ is ready to help you walk that road with clarity and confidence.