How is your relationship with your banker?

Some business owners have close relationships with their bankers, others wish they didn’t need a banker and still others only interact with their banker when necessary.  Bankers have a vested interest in your business.  Whether they are in the board room or calling on customers, they want to be assured that their interests are aligned with the interests of the business owner.

In our local market, there has been a lot of flux in the banking ranks over the past few months.  A number of banks have replaced their regional presidents and some have made decisions to shift their resources away from smaller clients.  This is not a time to be unknown by your banker and those in their chain of command.

I believe banking customers should stay in touch with their banker and find opportunities to meet others in the bank.  They should also nurture alternative banking relationships.  Having spent much of my career in industries tied to the construction industry, I have seen banks take a position that they would prefer not to have exposure in my industry.  In one case, a line of credit was withdrawn and in another the bank made it clear that they would not extend additional credit.  As a borrower in these situations, it certainly helps to have built alternative relationships.

Companies tend to share their financial information only as dictated by their loan covenants.  What if you provided more data than was requested?  What if you gave your banker monthly financial summaries, accompanied by a short note about the exciting things going on in your company?  Your banker would know more about you and your organization.   Their impression of you as a customer would be different from those customers who have avoided them.

If times are tough, it is even more important to communicate with your lender.  Let them know that you are on top of the situation and taking pro-active steps to reduce costs, grow new channels of business, and in short, protect your investment and their loan exposure.  I recommend that these be conversations, not written communication.  Invite your banker to coffee or lunch and make a point to see them at least quarterly.

Bankers are more willing to stand in your corner and lobby for your interests when they know you, know your organization, and trust that you are running your business in a way that demonstrates that you value their interest.

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