4 Key Tips to Building a Strong Banking Relationship for Long-Term Success
As an entrepreneur, one of the most important decisions you will make is choosing the right bank to support your financial needs. A good banking relationship can help you manage your finances, access credit, and grow your business.
For my family business, we took our banking relationships seriously. We had some unique challenges, such as a $25 million expansion in a rural market.
When choosing a bank, there are several factors to consider. Here are four key tips to keep in mind:
- Location: Consider the location of the bank and its branches. If you plan on making frequent trips to the bank, you may choose a bank with a branch near your office or home. Alternatively, if you do most of your banking online, you may not need to worry about the bank's physical location.
- Services: Consider the types of services the bank offers. Some banks specialize in small business lending, while others offer a full suite of banking and financial services. Think about the services you will need as your business grows, and choose a bank that can support your future needs.
- Reputation: Look for a bank with a strong reputation for customer service and financial stability. Research the bank's ratings and reviews online, and ask other entrepreneurs in your network for their recommendations.
- Relationship: Finally, consider the importance of building a strong relationship with your bank. A good banking relationship can help you access credit, negotiate favorable terms, and receive personalized service. Look for a bank interested in building a long-term relationship with you and your business.
When the pandemic hit in 2020, our banking relationship was tested. The strain of making payments for our $25 million expansion loan needed to be figured out. We had been making payments on the interest as the principal would have put us in the red, potentially forcing us to shut our doors.
The principal payment was coming due soon, and we could not afford to make that payment as that would have killed our operating cash flow. So we went to our bank, opened our books, and asked for grace to extend our interest-paying period. While this was an extended payment period, it allowed us to keep our doors open and continue paying our employees. Without the relationship with this bank, we would not have been able to take care of our people, thus the people they came to serve each day.
In conclusion, choosing a bank for your new business is an important decision that requires careful consideration. By researching your options and weighing the factors above, you can find a bank to help you achieve your financial goals and grow your business.
Here to serve,
Parker Pursell | President of eQRP | LinkedIn