Whether you need new or expanded banking services, or you’re just banking as usual, building a relationship with your banker is always a good idea.
Holding regular meetings with your banker is beneficial to both the business owner and the bank. During this time, you will talk about your company and what you want to accomplish. In turn, your banker will discuss what the bank can do for you.
Even if you don’t need anything from the bank right now, these meetings can lead to new solutions or networking opportunities that you never would have known about without the bank’s assistance.
And if you are looking at expanding your business and anticipate needing the bank, these meetings are even more important. If you approach the bank with a plan to grow and expand, your banker can advise you how to do that while saving you time and money.
“Always keep your banker involved and engaged in your business,” says Darlene Nowak-Baker, executive vice president and lending manager with First Place Bank. “Do this in good times and bad, whether you need something or not. Your bank wants to work for you, but it can’t do it if it never sees or hears from you.”
Smart Business spoke with Nowak-Baker about how to build relationships with your banker, how to prepare for meetings and the benefits of doing so.
What makes a good banking relationship?
You should have a true partnership with your bank and bankers. Your banker should be someone you trust who is working for you and for the good of your business.
And the biggest part of this partnership is having regular meetings to discuss your financials, your needs, your concerns and your industry, to have your banker tour your facility and/or to learn how you conduct business on a daily basis.
But this goes both ways. You have to stay in contact with your banker as much as he or she does with you. Certainly, if you have a problem or need something, call your banker.
But share the good news, too, like when you get a new contract or make a big sale. Good, bad or indifferent, your bank needs to know what is going on with your business.
And even if you don’t need anything, a bank can help you partner with other companies that it services. Banks often bring their customers together to network, allowing local organizations to get to know each other while learning about the bank’s services. However, none of this can happen if you don’t stay in touch with your bank.
What does a business owner need to bring to a meeting with his or her banker?
You will want to have your last three years of tax returns, both personal and corporate, with all supporting schedules and K1s as well as a personal financial statement.
In addition, you should bring an interim financial statement and a 12-month income statement projection, as well as the last six months of receivable agings and payable agings.
It would be beneficial to put together a management scenario, a background of who owns your business, what they do and how long they’ve been in business — a who, what, where of your company.
Now, if you’re looking to buy a new building, you will also need to show what you’ve been paying in rent and other expenses.
If you’re looking to purchase new equipment, you’ll need to show projections of how the equipment will benefit your business. Will it increase sales? Lower costs? What will the net income be?
How many bank professionals should a business owner get to know?
Your loan officer will be your primary contact, but more often than not, you’ll become quite familiar with the branch managers and assistant branch managers. Good conversations usually start with branch managers and end with loan officers who provide winning solutions.
But really, it’s a good idea to know as many people at the bank as you can, particularly if they know your business and its industry. The more people you know at the bank, the better your banking relationships will be. If you’re a mid-sized business owner, it is important to involve your CFO or top accountants in your banking relationships.
They’ll likely understand the nuances of your company’s financials, and the bank will benefit from knowing several people within your organization.
How often should a business owner meet with his or her banker?
Ideally, even if it’s just a phone call or e-mail, you’ll want to contact your banker at least quarterly. Your banker will be reviewing and analyzing your financial statements to keep informed on how your business is progressing.
Keeping in contact with your bank can only help you.
Darlene Nowak-Baker is an executive vice president and lending manager with First Place Bank. Reach her at (248) 358-6403 or [email protected].
