What to look for in banking partner
We all know that in real estate it’s "location, location, location." Less commonly expressed but equally true is that for a business, the mantra for banking is "relationship, relationship, relationship." The most important long-term relationship a business has is with its banker, so it’s important to find an institution that is an asset to your business. You want a bank that will help you meet your financial goals, weather the inevitable challenges of the business cycle, give advice if needed and meet your day-to-day financial obligations.
To create a pool of potential banks for your business, you’ll need to look at your current operations, as well as future plans. For example, you may not need international services now, but if you expect to within the next five years, you’ll want to factor that into the equation. Make a list of the services that are important to you. Among those that businesses consider most often: checking, money market, safe deposit, term loans, lines of credit, SBA loans, letters of credit, wire transfers, lock box service, credit card processing, overdraft protection, foreign currency, 401K administration, and payroll services.Of course, proximity is a critical factor to most businesses, but you must limit your choices to financially strong, legitimate banks, as defined by bank rating services and the Federal Deposit Insurance Corp. (FDIC). Now that you’ve narrowed your search, seek references. Consider your business contacts, the local Chamber of Commerce, golfing buddies, suppliers, customers – anyone you know who already has an established relationship with any bank on your "short list." Ask them specifically what they like and what they don’t like. What do they wish was different about their banking relationship?
Now that you have your pool of "possibilities," it’s time to select a banker. Visit the banks that interest you most. Take note of the lobby traffic. Are the bank employees friendly and helpful? Is the branch adequately staffed? Ask for an appointment with a banking officer. Don’t just visit with an available representative. Call to confirm your appointment in advance. Was it difficult to speak with an actual person? Was your call routed to another location?
Come to your appointment with questions prepared: Where are decisions made? Who makes lending decisions? Are there any mergers pending? How long has the officer been with the bank? What is the lending authority? Do they have particular kinds or sizes of businesses they specialize in? What is their educational background? You’re looking for someone who will understand your business, have the authority to meet your requirements and who will be accessible to you.
Be prepared for their questions, too. If you already have an established business, take copies of your most recent financial statements and business plan. If you’re just starting your business, bring your business plan and be prepared to discuss the opportunities and threats facing your new venture.
The right banking relationship is worth all this effort and more. If the relationship is right, your banker will be one of your most trusted advisers. Your banker can offer solutions you may not even know exist and enable you to focus on the operation of your business.
To help you get started, BauerFinancial offers Hometown Bank Ratings, which provide a list of every bank in your area. The list includes the BauerFinancial Star-Rating (a safety rating), the FDIC certificate number (ensuring the bank’s legitimacy), phone number, website, year established, and number of U.S. branches for each bank in the designated area. In addition, the physical address for each branch in your area is provided. For more details, call 1.800.388.6686 or visit www.bauerfinancial.com.
Karen Dorway is president and research director of BauerFinancial, an independent bank rating and research firm based in Coral Gables, FL.
WBJ Web Partners
Most Recent
Most Recent
0 Comments