Accountability for Lenders: Why Loyal Borrowers Pay More, and How a Good Broker Holds Banks to Account

Banks treat long-standing borrowers much the way insurers treat long-standing policyholders. The repayments come out like clockwork each month, and the hope is that nobody ever stops to ask whether the deal still stacks up.

I watched it happen for years as a banker. Some of the clients who had been with us longest were sitting on the least competitive terms in the book. It wasn't deliberate. It's just that no bank picks up the phone unprompted to offer you a lower rate and hand itself extra paperwork in the process.

Holding lenders to account is the part of this job I get the most satisfaction from. Sometimes that means sharper pricing, sometimes a better structure, and sometimes stripping out covenants that stopped being relevant years ago.

Why the Longest Relationships End Up on the Worst Terms

None of this comes from bad intent. It's how banks are built.

• Pricing is set at the start and rarely revisited. Your margin was agreed when the facility was written, against the risk and the market at the time. If your business has grown, paid down debt or added security since, the bank isn't obliged to pass that on, and usually doesn't unless you ask.
• New customers get the sharpest pricing. Banks compete hardest for business they don't have yet. The discount that wins a new client is rarely offered to one who's already on the books.
• Relationship managers are stretched. A banker looking after a large portfolio spends their time on new deals, problem loans and annual reviews. A good client paying on time is the last file anyone opens.
• Annual reviews protect the bank, not you. The review checks whether you still meet the bank's conditions. It doesn't check whether the bank still offers you a competitive deal.
• Covenants pile up. Conditions written for a younger, riskier business stay in the facility long after the reason for them has gone.

What "Holding a Lender Accountable" Actually Means

It isn't about threatening to leave. It's about giving the lender a clear, evidenced reason to improve the deal, and a real alternative if they won't. In practice, a good commercial broker looks at three things.

1. Pricing. The interest rate is only part of it. Line fees, unused-limit fees, establishment fees and the margin over BBSY all add up. We convert every offer to a single all-in cost so you can see what you're really paying, then test it against what other lenders would charge for the same risk today. The Glenclair Pricing Index shows how margins differ by asset class, gearing and lender tier.

2. Structure. Many businesses are on facilities that suited them years ago: a term loan amortising faster than it needs to, an overdraft that's too small, security spread across properties that could be released, or personal guarantees that are no longer justified. Restructuring can free up cash flow and security without changing lenders at all.

3. Covenants. Interest cover ratios, gearing limits, reporting requirements and restrictions on distributions all cost you flexibility. Covenants set when the business was smaller or riskier should be reset to reflect where it is now. Removing one tight covenant can be worth more than a small rate cut.

Why a Broker Can Do This Better Than You Can

You can always ring your bank and ask for a better rate. Sometimes it works. But the bank knows how much effort it takes for you to move, and you don't know what the rest of the market would offer. A broker changes both sides of that conversation:

• Real evidence, not a bluff. A competing term sheet from another lender is far more persuasive than "I've heard I could do better".
• A full view of the market. We work across 60+ lenders, including the Big Four, second and third-tier banks, non-banks and private credit. We know who's actively lending in your industry right now.
• Knowledge of how banks decide. Having sat on the bank side, we know where pricing authority sits, what a relationship manager can approve and what has to go to credit, and how to present your file so it gets a yes.
• No awkward conversations for you. We do the negotiating, so your day-to-day relationship with your banker stays intact.

Often the best outcome isn't moving at all. Once your current bank sees a genuine competing offer, it will frequently match it or improve its terms to keep you. Either way, you know your deal reflects the market, not just your loyalty.

Signs Your Lending Needs a Market Test

• Your facilities haven't been compared with another lender in more than two or three years.
• Your business has grown, become more profitable or reduced its debt since the loan was written.
• You're still giving personal guarantees or property security you think are no longer necessary.
• Covenants or reporting requirements feel out of step with the size of the business.
• Your facility is coming up for renewal or an annual review.
• You can't easily say what your lending costs you each year once all fees are included.

Worth Checking

If it's been a while since anyone tested your lending against the market, it's worth doing. And if it turns out you're already on a sharp deal, that's not a bad thing to find out either.

For more on how the process works, read how independent commercial finance brokers save businesses money and how a banking tender works, or see our commercial refinance service.

Book a free, no-obligation consultation and we'll tell you honestly whether your current deal reflects the market.