Bank References

What they really mean - a legal FAQ from Roger Sinclair

Have you ever tried to understand a bank reference?

Well, this is what they really mean!

• 'If you refer to Joe Bloggs Ltd'...
  - you should check the name against which you asked for a reference
• 'A properly constituted limited company'
  - when the account was opened the bank satisfied itself that the company was legally incorporated
• 'Undoubted'
  - no problem about the ability to pay - proceed
• 'Will prove good for your figures'
  - a good reference
• 'Should prove good for your figure'
  - a 'maybe' reference - proceed, but monitor payments carefully
• 'Working capital appears to be fully employed'
  - the customer has no money to pay - DO NOT proceed without further security
• 'Figures higher than we expect to see'
  - the customer is seeking more credit than they can cope with - DO NOT proceed without further security
• 'Unable to speak for your figures'
  - the bank is unwilling or unable to give a reference to the value involved - trade with cash or with additional security
• 'We have no reason to believe that they would enter into any commitment they felt unable to fulfill'
  This is NOT a good reference - if you want to be safe, trade with cash or with additional security

I'd really appreciate your feedback on this FAQ - so mail me and tell me what you think of it, if it's been useful to you, or let me know of any specific problem you have where I may be able to help.

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This page was last updated on 1 January, 1997.

No liability is accepted for any inaccuracy in the information in these pages - see full disclaimer

© Roger Sinclair & Egos Ltd - roger@egos.co.uk 1996 - All rights reserved - see full copyright details

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The information on these pages is provided free and for information only, and is provided 'as is'. Whilst believed to be correct, it is in no way comprehensive. It is provided for your interest only and is not intended to be relied on as formal legal advice. The posting of information on these pages is not intended to create a lawyer-client relationship, and you should not act or rely on this information without seeking professional advice. No liability is accepted therefore for any errors, or for any losses that may be incurred if it is relied on.

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