Kennedy & Coe: Advice about Working with Your Banker
What are your bankers facing these days?
What can you expect from your bankers in the near future?
- Expect the bankers to stay pretty close to their policies and internal guidelines. Every bank has a Board-approved loan policy that outlines desirable and undesirable credit. Regulators expect bankers to follow their internal policies or provide strong explanations when they do not. This means you should expect more requests for collateral, current financial statements and tax returns, and more visits from your bankers.
- Expect your banker to be pro-active. They need to stay in touch with their customers, both to keep the good ones and to stay on top of situations that may have some signs of weakness.
- Expect your banker to hold the line on interest rates. While they will negotiate for a good deal, they will be more inflexible in exception, problem, or troubled situations.
- Keep the lines of communication open. Don't just call him or her when you need to borrow. Maintain a good working relationship with your banker. You'll want that the next time you need cash for an expansion, or when you experience difficulty in your operation. Take some time to deliver substantial payments in person.
- Provide information when and as requested. Your banker needs to document his advocacy for your borrowing in various documents, meetings and committees in the bank. Bankers see customers who are untimely or reluctant to provide information as difficult or perhaps symptomatic of a problem in the loan itself.
- Finally, help your banker understand your business. Invite him to a walk-through of the operation, and spend time helping him or her understand what's unique about your business. He can use that first-hand knowledge when he presents your case to the bank's loan committee.