Forging a relationship with your banker
can pay huge dividends. By openly and
frequently communicating your business needs, you allow your banker to become more proactive and less reactive. A collaborative banking relationship benefits all
parties involved: Companies receive the support they need and bankers have the opportunity to offer targeted banking solutions.
In order to fully take advantage of your
bank’s products and services, it is important
to meet with your banker on a consistent
basis and provide as much information as
possible.
“I’ve never heard of a situation where we
had too much information — the more the
better,” says Melissa Pollard, senior vice president and group manager of Comerica Bank’s
North Orange County Middle Market Group.
Smart Business spoke with Pollard about
establishing a personal relationship with
one’s banker, how to prepare for banker
meetings and what type of service and performance standards should be expected.
Why is it so important for business owners to
establish a relationship with their bank?
Establishing a relationship with one’s bank
is very important because it adds color to the
business owner’s situation. We have the benefit of financial statements and quantifiable
information, but it’s the qualitative information that we gain by getting to know the business owners and senior management. In fact,
when we make credit decisions, one-fourth
of our assessment is based on management.
From a banker’s perspective, it is important
to have a relationship with a company’s key
individuals so we can effectively rate management and make proper evaluations.
How often should business owners meet with
their banker?
It really depends on the business. As
bankers, we try to tailor our approach based
upon the client’s preferences. There are some
clients that love to meet monthly or, during
the throes of a transaction, even weekly.
Other clients prefer a quarterly approach. We
strive to be proactive and upfront in asking
what type of schedule best meets our clients’
needs.
How should a business owner prepare in
advance for a meeting?
A meeting with your banker provides the
opportunity to showcase your accomplishments over the past quarter or however
many months it has been since the previous
meeting. In order to make the most out of a
meeting, it is important to have specific
objectives in mind. This can range from helping your banker get his or her arms around a
new business opportunity to discussing your
recent projections.
Bankers don’t like surprises, so the more
information the better. Being proactive and
sharing as much information as possible
helps us to anticipate future needs. It is so
much easier if we know in advance that a
client may miss one of the bank requirements
because then we have the opportunity to
modify or alter the requirements to keep that
client within compliance.
What type of information should be brought
along?
If it is a brand-new company that we’re still
trying to get to know, it is important to provide historical information and the background on key managers, including resumes
or business biographies. This allows us to
have an understanding on how the company
has evolved over the years and possibly over
different generations.
If it is an existing client, we already have the
benefit of this historical information, so we
need the updated financial performance relative to the client’s business plan. Also, it is
important to provide qualitative information
that rounds out the numbers and enables us
to see what is behind the obvious mathematics. A business might think it is bringing in too
much information and will bore their banker,
but there can never be too much information.
Who should be present at banker meetings?
It depends on the size of the company. With
some companies, we deal with the business
owner and/or CEO, which can be the same
person. But sometimes it is the CFO that we
are working with on a regular basis. If the
CFO makes the final call in regards to financial decisions, then developing a strong relationship with that person is just as critical as
it is with a business owner or CEO.
What type of service and performance standards should owners expect from their
banker?
They should expect the same standards
that we enjoy from our clients, which include
being able to undercommit and overdeliver
and being a business partner through thick
and thin. It is easy to provide banking products and services when factors are very
favorable, but our most loyal of relationships
have been solidified during situations where
there have been bumps in the road.
Bankers should stand behind their client
and give candid feedback in terms of what
they can and cannot do. If it is something that
truly does not fit their area of expertise, they
should do their very best to refer outside
resources. And the relationship works both
ways. By providing candid information and
being forthcoming about their business challenges, clients will make it easy for their
banker to service their needs.
MELISSA POLLARD is senior vice president and group manager of Comerica Bank’s North Orange County Middle Market Group.
Reach her at (714) 940-6751 or [email protected].