Small Business Financing — You and Your Banker, A Relationship

Skye Leist
July 22, 2011

We often expound on the virtues of getting to know your banker before it ever becomes necessary to ask for a loan. And that is sound advice. One question we do keep getting, however, is “How do I establish that relationship?” It is really not so hard.

Starting out is always the toughest part. Most entrepreneurs open a business account wherever they had their personal account, simply because it is convenient. Others tackle the banking decision with a bit more direction, perhaps using one of the list of questions that we have in our Start Up Right Now series, questions like:

How long have you been at this branch?
How many businesses like mine do you work with?

There’s a whole passel of great questions to ask potential bankers, just to find out if they might be a good match with your particular type of business.

There are other things, too, that a good banker will be able to help you with. For example, your banker should be able to recommend a good accountant for your type and size of business. A small business making $50,000 a year requires quite a different sort of accountant than one making $5 million.

A good banker can point you in the direction of the right local business groups to join, again ones that are valuable for your size and type of business. The Chamber of Commerce isn’t always the best answer for a home based business, but may be just right for a large manufacturing company.

A good banker will also know the names of several lawyers who can help with your specific issues, whether that is in incorporation, patents or non disclosure agreements. Most small businesses don’t need a large sophisticated law firm, just a small office of one or two or three attorneys usually works fine, as long as they are business oriented.

These are all reasonable things to ask of a banker as you begin your business, or whenever you relocate to a different area. And NOW you’ve got something to talk about. Was the recommendation to a lawyer a good recommendation? Write your banker a note and thank her, and the next time you are in your bank, walk on over and shake her hand.

Questions like these establish in the banker’s mind that you are a serious business person, and not a part time wannabe. And the follow up thank you is absolutely invaluable.

If this kind of dialog is not part of your banking relationship, you are with the wrong bank. Start interviewing now to find the one that will mesh with your business. Then, when you do need financing, the groundwork will already be in place and you will be halfway there.

Handle Your Business

Fresh Views of Your Business