Business is more competitive than ever
with companies having to re-examine
their strategies on an on-going basis.
Banks are no exception.
According to Tom Panos, president and
chief commercial banking officer of MB
Financial Bank, banks have had to become
more efficient. Excellent relationship managers providing solutions with a wide
range of commercial products and services
is a must.
Smart Business spoke with Panos about
the matters a growing company should
expect from its bank.
How have banks had to adapt to today’s business environment?
They’ve had to become more efficient
and competitive in the delivery of their
products. As a result, they’ve made significant strides in quickly providing solutions,
including a wide variety of tailored commercial credit products. Bankers understand that to be competitive in a marketplace that continues to consolidate, they
must be able to make credit decisions
promptly and complete funding quickly.
Bankers must recognize and work diligently to accommodate customer deadlines.
In addition, bankers need to keep up with
the needs of growing companies. That
means they need to help customers manage cash flow and interest rate risk by providing access to sophisticated treasury
management and capital market products.
What kind of treasury management and capital market products are available?
Treasury market products include:
Internet Banking, a window into the bank
to track daily cash flows; remote deposit
capture, which essentially places a branch
in a customer’s office; ACH transactions,
online wire transfers and more. Capital
market products, such as Interest Rate
Swaps, assist borrowers in managing their
financing costs over extended periods of
time. An experienced commercial banker
may also introduce customers to wealth
management, private banking, or short-and long-term investment advisors including 401(k) plan management.
Has better technology enabled banks to better
serve their customers?
Yes, it’s made it relatively easy for them to
offer and deliver new products, though
technology can’t do that alone. Well-trained
bankers will ask the right questions. That
goes a long way to ensure that the bank
matches the right technology and products
that provide the lift in efficiency that a business needs.
In what areas can a bank serve its customers
more efficiently on the commercial loan side?
There are three areas of opportunity to
provide speed in commercial lending: the
origination process, loan documentation
and loan servicing. When all three are done
well, it leads to significant cost savings and
efficiencies for both customers and banks.
What’s the key to originating a loan quickly?
To originate commercial loans quickly,
bankers must get the information they
need from customers promptly and then
quickly steer them through an approval
process. If a banker doesn’t let a prospect know exactly what’s required [typically
three years of financial information], the
loan application can be delayed.
Of course, a borrower’s delay in supplying information can also hold things up.
When the proper information is available,
loans can sometimes be approved in just a
few days or less. In addition, many banks
offer instant approval on some consumer
and small business loans.
What about getting the customer the money
he or she needs?
Once a loan is approved, loan documentation is required. Customers have the
opportunity to influence how quickly this
step is completed by providing their bank
with important information, such as corporate resolutions and asset descriptions. On
larger, more complex loans, experienced
bankers can add significant value in steering loan document preparation duties to
well-qualified transaction attorneys. A
banker who remains involved in this
process will ensure that attorneys draw up
documents that accurately reflect the
agreed-upon terms. That can save big
headaches in the long run.
What’s the most critical factor in obtaining
commercial credit quickly?
The relationship a business has with a
bank and its banker. The days when banks
averaged one employee for every $1 million in assets are gone. Today’s banks have
far fewer. That makes it even more vital
than ever for borrowers to get to know
their bankers, especially when speed matters. All businesses have short- and long-term goals. A banker who truly understands a business’s strategic plan will be
that company’s advocate throughout the
loan application, approval process and
funding. Couple that with a banker that can
assist in providing other critical services
such as a full range of treasury management products for example, and you have
the makings for a great partnership.
TOM PANOS is president and chief commercial banking officer
of MB Financial Bank. Reach him at (847) 653-1995 or
[email protected].