Keys to a Successful Banking Relationship
Many companies wrongly approach their bank as an adversary, especially during times of distress. They hide bad information and try to delay discussions with their bank. Most bankers aren’t stupid. They can see the writing on the wall when this kind of behavior begins. A banking friend recently told me that if a client doesn’t call him back, he has to assume the absolute worst. And eventually he has to take action on that assumption.
So what is the other side of the coin? How can you have a very successful relationship with your bank? The easiest way is to be very profitable. If you’re in that position, expect many offers to the baseball game. However, many companies are not in this position today. So how do you stay in your bank’s good graces?
The answer centers around one word: Communication. My overwhelming experience with banks is that staying out in front of them with open communications is the best way to get good service. It makes your company stand out in comparison to most companies that hide bad news and try to keep the bank away. I’ve worked in companies that had little business getting loans extended, but because of the great relationship we had with our bank, they rolled the dice on us. Granted, those were different economic times but the song remains the same.
If you are working with a good, community based bank that values relationships, communicating regularly and openly with your banker will go a LOOOOONNNGGGG way. If your banker trusts you and believes in you, they have the ability to get things done on your behalf and stave off the lions at the gate.
Need a name or two of bankers that fit this mold? Shoot me an email, JoshTurner@GatewayCFO.com.
About Gateway CFO Solutions, LLC:
Based in St. Louis, Gateway CFO Solutions helps small businesses grow profits and revenues, and bring peace of mind to their company’s financial picture through part-time CFO services. Many small business owners are without a trusted advisor for the financial side of their business, and they have seemingly few resources to turn to for expert guidance. We provide that guidance and act as a trusted, strategic advisor for our clients. We provide both broad, global planning and “roll up the sleeves” technical services.
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