Mary Erb from corporate law firm Heatons explains why your bank should be your first port of call when a corporate deal looms, and why the underlying relationship with your bank is so important.

For many business people, getting involved in a corporate deal can be one of the most exciting events in their career. Acquiring another business, engaging in a merger or mounting a management buy-out or buy-in, or even re-structuring an existing business, can be pretty heady stuff.

If you've succeeded a member of the older generation in a family firm, bought out one of your relations to take majority control or perhaps decided to gear up the balance sheet and redeem some of those preference shares, you'll know that it can be quite an experience.

For a while being surrounded by agile corporate financiers has its attractions but, as the dust settles on the transaction, the deals circus will certainly move on. Suddenly, after growing accustomed to being at the centre of the action, you can feel rather isolated.

So, where are the deal makers that you got to know so well during those weeks or months or excitement? Will they still be there to hold your hand and offer advice? Are they still at the end of the 'phone, eager to meet at the drop of a hat'?

Probably not. It's a harsh reality of the commercial world that they'll be off in pursuit of their next transaction. Their reputations are only as good as their last deal. The structured finance circus has moved on to its next destination.

Apart from your solicitor, probably the closest business relationship you'll have from here on in will be with your bank, but do you know your new manager? More to the point, how well does he know you and your business? Probably not well enough.

When banking arrangements change for whatever reason (even simple re-banking), the all-too-common 'hit and run' bank handover, is an extremely short-sighted approach. This benefits nobody, especially the banks that should have learned the value of long-term client relationships by now.

On-going support

So, in an ideal world, what support should a bank be offering to the new management of a company following an acquisition, succession, MBO or similar change?

In my opinion, the support process should begin well before the change happens. The bank of choice should be the first port of call the moment a major change of direction is contemplated. There shouldn't be a clear divide between the bank's structured financiers and its corporate relationship managers.

Ideally, the team that's been responsible for getting the transaction completed should work closely with the relationship managers in whose hands the business will go forward.

When a change of business bank is involved, customers rightly expect the transition to be completely seamless. The only way this can be achieved is if the relationship manager keeps in touch with the customer and his or her advisers throughout the deal process.

To illustrate the point, consider what happens when the bank's corporate deal team implements a novel solution to overcome a difficulty that has arisen during negotiations. They may have proposed invoice discounting or other cashflow finance measures or refinancing assets like plant, machinery or vehicles. The business will have to live with the solution. Often, what seemed like a clever answer in the middle of a heady discussion, can prove to be confusing or administratively cumbersome in the day-to-day world of running a business.

In such circumstances, the value of having had a relationship team on hand from the outset can't be over-estimated. As well as handling the day-to-day requirements of the business, they will prove invaluable when it comes to unravelling any complications that arise, because they were around to see why a solution was introduced in the first place.

In the honeymoon period, management has to divide its attention between running the business and satisfying the requirements of its various backers. The management can only get on with the job of achieving objectives if the routine financial requirements of the business are already in safe hands. Few business managers can succeed if they are constantly dissipating time and energy looking over their shoulder to check that their backers are informed about every move.

By getting its day-to-day financial support from the same camp as its working capital; commercial loans and mortgages; cashflow finance; vehicle fleet or asset finance provider, a business can focus on its commercial goals. Surely, in everyone's interest.

Make sure your bank's corporate relationship directors should work closely with the structured finance team to ensure that the ongoing banking relationship is already on a firm footing when the deal wizards move on to the next transaction.