Why is the Defence of Request Important?
In practice, this part mainly relies on a person in a financial institution that is a business relationship manager.
They are the sales force of financial institutions by having the extremely good knowledge of products and services of their own financial institution. They also have the knowledge, the necessary experience in working with entrepreneurs, their own budgets that need to be realized until the end of a year, and their reputation in front of analysts, i.e. risk-takers.
Their reputation is earned by the numbers of approved investments, by the knowledge of handling cases, or by the knowledge of financial components of cases and the knowledge of credit risk policies. Their track record does not have any deviations in terms of payment of approved investments, or failure in realizing projects in relation to the planned conditions or the client’s default.
They are not financers, they do not deal with financial modeling, stress tests, or similar calculations. On the other hand, risk-takers, i.e. analysts of credit risks, are the ones who make the decision about your financing, which needs to be defended by the sales. Finally, when choosing a potential investor (financial institutions), it is essential to choose the right person who will complete the entrepreneur’s request through the process undertaken by both the analysis and the risk unit.
What is more, it is necessary to have someone competent by your side who will know how to give support to the business relationship manager. Often, during investment projects, the questions that are raised on account of risk towards a business relationship manager deal with:
- RDG simulations on stress tests
- the profitability of certain parts of business/projects
- and similar requirements
It is precisely in this part that, in order to minimize the risk, entrepreneurs are advised to have a consultant through the whole process of financing. Ultimately, it is in everyone’s interest to close the financial structure of investment with the necessary financing, i.e. signing the financing contract.