Most businesses that have been around for a while will undoubtedly have a laundry list of different bankers with whom they have dealt in their past. While every business has a bank, very few have a banker. Bankers are often viewed as being the obstacles standing between an entrepreneur and the credit needed to capitalize on opportunities in the marketplace.
Back in the late 1980's banks increasingly became insensitive to the "personal" component of a customer relationship. Business owners used to be able to work with one banker for business credit and personal credit. These days a business owner has a different lender for everything between A and Z. It's really quite inconvenient for the borrower. It is increasingly more difficult for small business owners to find the right banker to meet their business's financing needs.
Relationships between bankers and business owners take on many different shapes and hues but the best ones always possess a strong degree of trust and reliable communication. It's a human relationship as well as a business relationship.
Creating a Solid Relationship
As is the case with any relationship, good communication is the key to success. Clear and frequent communication is the necessary ingredient of a strong owner-banker relationship. Whether you are dealing with a conventional bank or a commercial finance company, it's a good idea to communicate at least monthly with the decision maker. Invite your lender to your office and out for lunch a few times each year. Show your gratitude.
Also, be sure to keep your lender informed when something important occurs or whenever you are about to transition from one point to another. Nobody likes surprises, especially creditors. The relationship with your lender always needs to be nurtured day in and day out....not once a year. Invest some of your time in building the relationship...it will payoff in the long run.
Benefits of Having a Strong Banking Relationship
Better access to credit is one of the benefits common with those small business owners who have good banker relations. The more comfortable and secure a lender is with the person asking for the credit, the better chance the request will be approved. Creditors love having a strong sense of security. Peace of mind on both sides of the table equates to harmony.
References are great things to offer whenever a business owner is seeking to establish new relationships. Many times there is not a better reference than that of a happy banker's. Whenever a banker has nice things to say about a business owner nothing but positive results will happen.
Also, bankers can usually provide a great deal of support in the form of economic data and information because they are exposed to so many different businesses and industries.
How to Avoid Poor Banker Relationships
If relationships with lenders are so important then why are so many small businesses suffering with their current situation? Communication – or the lack thereof – is probably the largest problematic area of weakness between entrepreneurs and lenders. Often times a borrower will be reluctant to divulge information that he/she thinks the banker will not want to hear. Nothing upsets a lender more than bad surprises. Honesty is the best policy. If something is not going quite the way it should, analyze the problem, formulate and game-plan along with a back-up plan and go have a meeting with your banker. Talk with your banker and spend some of your time.
Before getting into a relationship with a banker or commercial lender, do some due diligence and research on the company and person with whom you are about to enter into a business relationship. Get references. Make phone calls. Analyze the source that made the recommendation. Interview other prospects. Again, invest a little time in gathering data and information before you make a decision. It may save you a big headache. Whether you are seeking a real estate loan or a factoring company to finance your receivables, plan ahead and expect to spend a little time interviewing different sources before signing on the dotted line. Don't rush it.
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