Up Your Business LLC

Here’s a checklist to point you to a financial institution that fits your business

When Tom and Linda Swift’s small bank was gobbled up by another bank recently, it was a rude awakening for the two owners of a small business who were customers of mine. The personal treatment they’d come to expect suddenly came to a halt. The Swift’s new loan officer didn’t understand their product, market, sales cycles, or cash flow needs and treated the two business owners as if they’d wandered in off the street begging for a handout!  “I said, ‘Time out,’” Tom recalls as he was telling me the story of their recent experience with the new bank and loan officer. “I’m a viable customer, not an old mule in their stable to be used however way they see fit.”

If your bank (money store) is not providing the services you need to aid your business in its survival and or growth, it’s time to shop around. And it’s not just respect you should seek. Here’s a checklist to help you choose the right small-business bank.

• Avoid the sting of killer fees. With the economy in the dumps and most banks suffering from the effects of poor lending practices and the consequences of the economy on their borrowing customers, banks are looking for ways to generate income to offset their losses on the loan side of the balance sheet. In many instances what once was a free service may now be provided for a fee. Bank charges for the services you use can add up to a hefty sum. My advice is to review your bank statements closely and search for all the fees the bank is deducting from your account for services it is providing you. Make sure you know and understand what each service is used for and begin to question the use and or need for each service. Sit down with a bank officer and go over all your fees and services with the goal of keeping those services that are needed but reducing the total costs to you.
• Give yourself credit. Most businesses today accept payment for products and services both inside the business and on their website via credit card payments. My advice is to examine all the charges associated with the processing of these payments and investigate ways to lower your total cost with your current vendor or others as well as try to get your money faster.
• Pay attention to size. Banks with more than $1 billion in assets often snub small businesses, especially those looking for loans.  A loan of $250,000 or less may be too small to mess with in the eyes of a big regional bank at this time. Visit with loan officers of the bank to determine their willingness to lend money to meet your expectant needs. Also, visit with other local business owners who use that bank to learn of their borrowing experience with the bank. Even if you don’t borrow, it pays to visit with the bank first to determine their attitude towards providing you the type of service and attention you deserve and need.
• Ask how much it knows about your industry. If you envision a line of credit or loan application in your future, you’ll be best served by a bank that understands your business. Not all banks have the same loan appetites or competencies. It pays to “date your banker” first to get better acquainted.
• Assess your loan options in advance. I’ve worked with thousands of business owners over almost four decades and I’ve never seen or heard of one losing sleep over where to deposit their money. However, I’ve witnessed hundreds and hundreds that did lose sleep over whether or not they would be able to obtain the needed loan to fuel their business. Top banks are prepared to offer options to their business clients. It is my advice to business owners to always sit down with their loan officer way ahead of time and discuss loan options and availability. Don’t sweat the rates, unless you are borrowing millions. Slight variations in interest rates don’t matter much. It’s more important to shop for a banker who, if your venture doesn’t perform as expected, will restructure your loan and willingly work with you rather than seek foreclosure.
• Seek a bank that is customer-focused rather than self-focused. You might be saying to yourself that this point doesn’t make sense as a bank wouldn’t be in business if it wasn’t customer oriented. Too many banks today, because of all their loan problems, are more self-focused than customer-focused. They are too busy licking their wounds to care or notice what is going on with their customers and their wants. My advice is to visit with the loan officer. Determine, via good question, if they have an interest in you and your business or if they are too busy with other matters to give you the attention you deserve.  
• Ignore geography. To a large degree technology has replaced the need for convenience in banking. Shop for the bank that meets most of your wants and you feel will work with you in good and bad times (yours and theirs). The Swifts moved from a bank that was just blocks away to one in the next town. By scouting out the different banks in the area, getting referrals from friends and from others in their industry they found a bank and banker they could place their faith in. This far out weighted the need for convenience.
• Scout for a responsive bank. Once, when the Swift’s loan officer didn’t return their phone calls, they pulled rank and contacted the bank’s chairman. It wasn’t long before the officer called to apologize. Such personalized service is a rare but precious commodity in the current era of banking. I’ve found that a responsive and caring bank is the most important ingredient in a bank relationship.