The marketing campaigns all carry the same message: come to our bank and we’ll love you like an only child, take care of all your needs and eliminate the thought of ever considering going anywhere else.
The reality is something less than that, the degree of which is dependent on where you do your banking.
“The concept of relationship banking is that all of the accounts or loans a business has can be displayed simultaneously to the relationship manager or loan officer and analyzed,” says George Dawson, author of “Borrowing to Build Your Business” (Upstart Publishing) and a 23-year veteran of the banking industry. “It’s really more for the bank than the customer.”
On face value, it would seem that the idea would also benefit businesses, but too often, the realities disrupt what customers want.
“From a customer standpoint, it does not help you have a relationship with the bank,” says Dawson. Your account can still be reassigned. Loan officers leave on a regular basis, taking with them their understanding of your business, your products, your processes and your market. “You can have a relationship with a bank, but not with bankers.”
Relationship banking can help your business, even if it doesn’t necessarily make you the banker’s new best friend. Having a good deposit record can work in your favor, and depending on the size of the account, can possibly even give you a little leverage. Of course, account records may also show you taking out abnormal sums of cash from the business or illustrate a propensity for bouncing checks.
Besides having all of your accounts at one bank, the most important decision is which bank you choose to begin with.
“Businesses have the assumption that all banks are the same, and clearly they are not,” says Dawson. “You want to be with a bank that wants to do business with your kind of company, not make your kind of loan.”
Some banks will almost automatically give a loan that fits a certain specification, such as for heavy machinery, but put up a fight when it comes to granting a line of credit in an industry they don’t understand.
“Scout around to find out which banks like your kind of business,” says Dawson. “Talk to other business people. Ask them if they like their bank. Tell them you are thinking about finding a new bank and ask what their opinion is. It’s something you, as a business owner, have to take on.”
