Relationship banking

You may have heard the term relationship banking, but what does it really mean?

It means your bank is a business partner that is as interested in the success of your company as you are. Instead of seeing you as a one-time transaction in the traditional borrower and lender relationship, relationship banking builds a long-term partnership between you and your bank.

The quarterback of the bank team is the relationship manager. He or she acts as your liaison and as your adviser, creating continuity. The security of working with the same person builds a relationship based on trust, honesty, teamwork and friendship.

So how does this partnership benefit your business?

When relationship managers understand you and your business, they can be proactive in helping you manage your financial needs. They can suggest when to refinance a loan, when to consolidate debt or when to utilize an operating line of credit.

They can also give you advice on how to structure a loan when you are expanding. As your partner, your relationship manager will match business services to your needs without overselling unnecessary services.

It always comes back to putting the success of your business first. That means your relationship manager may even say, “No,” if the request might be harmful to the success of your business. Or, he or she may offer an alternative solution you haven’t considered.

Here are some steps to consider to get started on building a relationship with your bank.

Show you can manage your money

Introduce yourself to the local branch manager of the bank where you have your business account, if you haven’t already done so. Be diligent in managing your corporate account responsibly, and avoid overdrafts at all costs.

Start small

Take out a small loan for a vehicle or a piece of equipment and pay it back as agreed. This establishes a credit history with the bank. Don’t be late with payments on this or any loan.

Be upfront and honest

Always be honest with your bank representative, no matter how bad the news A well-informed relationship manager can act as your advocate within the organization. No one likes surprises. Honesty builds trust and confidence.

Educate your relationship manager

Invest the time to explain your business to your relationship manager. This is an investment that will pay dividends for years to come. Your relationship manager has the ability to help you network with other business owners, which could help you grow your business.

At its core, relationship banking isn’t just about building a long-term relationship. It’s also about protecting your business. Just as you would consult a lawyer for legal advice or an accountant for tax advice, you need a financial expert on your side to help champion your efforts to meet your business’ short- and long-range goals.

Dan Flynn is a commercial lender with The Grange Bank. He is located in the firm’s South Front Street main location in Columbus. Reach him at (614) 449-5338 or via email at [email protected]