Campari? Remind you of Leonard Rossiter spilling a drink over Joan Collins in a 1980’s TV advert? Maybe it does, but Campari is actually a little more influential than that.
What, Campari? Explain…
If you are running your own business and ever looking to borrow money then we encourage you to drink a Campari, hypothetically of course.
Campari is an acronym used to assess credit. Whilst most lenders will use computerised systems these days, even those are built around the same principles. So if you understand them and can apply them to your business then you are putting yourself at an advantage.
The items in Campari relate to what the lender want, BUT, they equally apply to your business as an entity in itself, so it is good practice to apply it, see what you come up with, then address any weaknesses. We would certainly encourage any business to do this prior to applying for finance, or before meeting the Bank Manager.
- Character (that is you and/or your business. Think skills, knowledge, experience etc
- Ability (management team, structure, leaders etc)
- Margin (think profit/cash versus the loan repayments)
- Purpose (what/why, is it relevant, reasonable, sensible etc)
- Amount (£50k for a ford fiesta is unreasonable, right price)
- Repayment (where from, think how many clients you have, repeat business etc)
- Insurance (aka security, think what if, what am I prepared to give/ prepared to lose)
What Do I Do With This?
The reason why bankers use processes such as Campari is to ensure they look at the logical areas of risk.
For the same reason we would encourage you to look at these areas, after all the bank do this to protect themselves from your weaknesses so surely you should be doing it also?
If you want to discuss this further, or buy us a Campari, then please add your comments below, email us via the website, or just give us a call.
See our other blog posts –
Why Profits Are Good, But Cash Really Matters /2013/01/14/cash-cash-cash
Six People Who Can Change Your Business /2013/01/13/the-6-people-i-met-who-changed-my-business
How Your Bank Sees Profitability, Not How You Do /2013/01/13/profitability-and-what-is-it-in-the-eyes-of-a-banker