Borrowing Risks Calculator

	Borrowing Risk Assessment Tool

Are you serious about reducing your borrowing costs? Would you like to know the ‘secrets’ of how your banker assesses you and your business in terms of risk?

The Risk Assessment Tool has been developed as a guide to:

1. Show you what you can do to get a lower rate of interest by reducing the risk.

2. Help you to identify your 'escape routes' if you hit a financial hole.

3. Help you improve your relationship with your bank.

You'll also find step-by-step explanations to help you complete the Tool successfully.

Important Note: Please note the Risk Assessment Tool is intended for use as a guide only. It is derived from Microsoft and the Forum of Private Business who cannot accept liability for any disputes arising between users of the Risk Assessment Tool and any bank(s) or other financial institions.

What has been the overall trend? Or have you proved your ability to make your plans work?
Very Positive	Positive	Stable / Unproven	Erractic / Decline

What is your management control information?
Accounting
	Weekly Gross income & Expenditure, Aged Debtors & Creditors, Bank reconciliations
	Month Profit & Loss
	Quarter Profit & Loss, Balance Sheet
	Annual Audited accounts, Bank Report
Financial Management
	Business Plan
	Cash Flow
	Budget
	Three Year Plan

What will you show the bank?
Accounting		Financial Management
	Weekly		Business Plan
	Month		Cash Flow
	Quarter		Budget
	Annual		Three Year Plan

Character of borrower - Stability & Dependability
Exceptional	Above Average	Average	Below Average

Will / Are we able to work together ?
Very Well	Well	Average	Not Very Well	Not at All

Results

Score Index	Score	INTEREST RATE OVER BASE
1*	300 - 400	1.50%
2*	250 - 300	1.50%
3	200 - 250	1.5% - 2.5%
4	150 - 200	2.5% - 3.5%
5	100 - 150	3.5% - 5.5%
6	50 - 100	5.5% - 7%
7**	0 - 50	Over 7%

* It is unlikely that any small business will reach these scores
** At this level of risk it is unlikely that the bank will lend

Acknowledgement:Based on Forms developed by the FORUM OF PRIVATE BUSINESS

Important: The results from this calculator should be used as a guide only, and it is strongly advised that you should consult an experienced or qualified accountant or financial/business adviser before making any decisions.

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