We all know that a banking relationship is crucial to identifying consistent opportunity areas for small business owners.
The connection can be so profound sometimes. I often believe small business owners would much prefer to uproot their family or business and move before considering changing banks. However, taking charge of the company’s future by switching your small business banking must take priority.
But companies operate in very competitive environments. It is more important that a banking relationship meets the needs of a growing company. Most importantly, to help the company maximize business funds, secure financing, evaluate business development opportunities and business plans.
If your Banker is not an asset in these areas, it may be time to switch banks.
On the surface, perhaps you may not consider it enough of a perceived benefit to go through the process to make the change.
Some of the qualities to review and compare may be substantial. When shopping for a new bank, review account fee charges, the amount of money you can borrow, and the interest rate at which the funds are offered.
Shop for both a bank and a Banker that understands your industry. Put less focus on the most reasonable terms, interest in collateral, and willingness to eliminate a person guaranty. Your relationship must be based on how well you are supported while in the stages of being profitable, breaking even, or losing money. The more you communicate about your financial position, the your Banker will be in a better position to advise you for the long term.
Small Business Banking and Accounting
Should your accountant be involved in a banking relationship regularly? What level of financial statement reporting is appropriate to share?
Without an accountant’s involvement regularly, the financials that banks receive may be prepared with different methodologies. Banks need consistency to evaluate requests for credit properly. A compilation from your bank statements can look quite different when an accountant prepares it than when your bookkeeper prepares it. Therefore, banks cannot solely rely on a bookkeeper’s interpretation of accounting.
Your Banker is one of the few experts to have in your business corner at all times. Their skills are essential to help you meet the needs of your company. Don’t be reluctant to change institutions when your requirements or circumstances change. Carefully weigh what is most important to your company’s future success. Your banking relationship should be more than the sum of your creditworthiness, bank deposits, and interest rate. Choose your bank, then make the best deal you can with your Banker.