The key that unlocks all the potential of a good business banking
relationship is regular and honest communication. When a bank knows you
and understands your business, you realize valuable benefits. At Leaders
Bank, we strive to develop long-term personalized relationships, which
allow us to provide each customer with unique solutions and advice. The
trust built through a close working relationship also allows us to be
more flexible when things may progress differently than you expected.
Since bankers at Leaders have banking tenure measured in decades, we’ve
seen many business situations that we can assist with, that our
customers may be encountering for the first time.
When economic conditions are tough, a good business bank can help you
find ways to control your expenses. It can also help you achieve a better
cash position with efficient processes such as optimally-timed payments and
faster conversion of receivables to cash. Additionally, a good business bank
can help you iron out your business plan.
The reality though, is that not all banks value an open and active
customer relationship. In fact, a survey by J.D. Power and Associates found
that an astonishing 1 in 3 businesses with annual sales of $10 million
reported having no contact from their bank. The survey also found that
business owners actually want to be contacted several times a year by their
bank to receive economic and financial advice and tips on partnering with
other businesses and expanding operations. In the case of Leaders Bank,
bankers proactively reach out to customers. Leaders invests in
relationships. The best way for us to strengthen relationships is to always
know what’s important to you, so we can assist with both your short- and
long-term goals.
Another way that a good business bank provides an edge is through its
network. Your bank should be able to identify opportunities and introduce
you to other businesses that may eventually become your customer, vendor, or
even the purchaser of your business. In addition to offering possibilities
with greater efficiency and profitability, a bank’s network can help in
other areas. We have numerous contacts in many specialties such as family
business consulting, tax planning and wealth management. Networking is one
of the most valuable benefits that we can provide our customers.
There are also ways to work efficiently with a business bank if you’re
seeking financing, especially if the economy is sluggish. You’re in the best
position for a loan process when you understand the “5 Cs” of credit:
Capacity, Capital, Collateral, Conditions and Character. Capacity is your
ability to repay. Capital is what you have invested in the business.
Collateral is additional loan support over and above cash flow, and
Conditions include the purpose of the loan, the economic condition of your
industry, and the condition of the economy. The last of the 5 Cs is
Character, which is critical because it can influence the other factors. The
bank analyzes how you’re likely to behave if your business situation
deteriorates and also examines your ability to run the business. This
managerial risk is often overlooked by business owners.
If a deal is weak on a financial or collateral basis, but the character
of the business owners is deemed high, then the banker will generally work
hard to find a way to make the loan. At Leaders, we go the extra mile if a
business owner is of good character.
As a banking relationship continues to develop, character remains
integral. It’s extremely important that we do business with good, honest
people. Honest people come to you right away with issues they’re dealing
with, and allow us time to work out solutions. They view problem solving as
a collaborative process.
Even if the economy is down, a banking relationship comprised of honest
and free-flowing dialogue delivers ideas and resources that can help your
business outshine others.
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About the author:
With more than 30 years of banking experience, Jim Lynch is president and
CEO of Leaders Bank, headquartered in Oak Brook, Ill.. He has served his
entire career as a lender to privately-held businesses, focusing on
companies with revenues of $50 million or less. In 1999, Jim led a team of
founders toward the creation and organization of Leaders Bank, the premier
commercial bank for privately held businesses, their owners and families,
and other entrepreneurs. To learn more, visit
www.leadersbank.com.
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Mel Marzan/Walt Denny Inc
