Your banker should be a partner
Q: I’ve prepared a good business plan and I have a good credit rating. Now I need to apply for a business loan. How do I find the right bank?
A:
Regardless of whether you borrow money, establishing a good working relationship with a bank that provides you with all the services youmay need is critical to your company’s long- term success.
In addition to shopping around for a low interest rate on your loan, look for banks in the community where you will be doing business that market themselves as lenders to small and midsize businesses, or for those with a commercial lending division that supports Small Business Administration loan programs.
Seek referrals from accountants, attorneys, insurance agents, trade associations, vendors and business peers. Visit with the commercial loan officers to learn about lending and service options and fees.
Choose a banker you’ll be comfortable talking with. Solidify your relationship. Trust and get to know your bank’s staff. Develop a personal relationship with bankers by treating them as partners. Send frequent financial reports. The more bankers know about your business, the more confidence they will have in you, and the more willing they will be to help in a cash crunch. Getting to know your banker helps demonstrate your character to your lender.
Look for the two- way street. Bankers who earn their keep are more than bankers; they’re sources of good business referrals. Ask bankers what business they can bring to your company.
“Bankers should demonstrate they want your business,” says Bob Pond, my SCORE colleague who has been on the boards of directors of numerous banks. “They should be interested in helping you start and grow your business so they can provide you with banking services to support your growth.”
A banker who isn’t interested in sending business your way probably isn’t the right banker.
And give your banker your business. Show your lender that you are a good risk. Move all of your personal and business accounts to the bank, so it can evaluate how you manage your money. This will also give you a chance to check out the bank’s loan policies and procedures before you start up.