Bank relationships Featured

8:00pm EDT August 26, 2007

Business is more competitive than ever with companies having to re-examine their strategies on an on-going basis.

Banks are no exception.

According to Tom Panos, president and chief commercial banking officer of MB Financial Bank, banks have had to become more efficient. Excellent relationship managers providing solutions with a wide range of commercial products and services is a must.

Smart Business spoke with Panos about the matters a growing company should expect from its bank.

How have banks had to adapt to today’s business environment?

They’ve had to become more efficient and competitive in the delivery of their products. As a result, they’ve made significant strides in quickly providing solutions, including a wide variety of tailored commercial credit products. Bankers understand that to be competitive in a marketplace that continues to consolidate, they must be able to make credit decisions promptly and complete funding quickly. Bankers must recognize and work diligently to accommodate customer deadlines.

In addition, bankers need to keep up with the needs of growing companies. That means they need to help customers manage cash flow and interest rate risk by providing access to sophisticated treasury management and capital market products.

What kind of treasury management and capital market products are available?

Treasury market products include: Internet Banking, a window into the bank to track daily cash flows; remote deposit capture, which essentially places a branch in a customer’s office; ACH transactions, online wire transfers and more. Capital market products, such as Interest Rate Swaps, assist borrowers in managing their financing costs over extended periods of time. An experienced commercial banker may also introduce customers to wealth management, private banking, or short-and long-term investment advisors including 401(k) plan management.

Has better technology enabled banks to better serve their customers?

Yes, it’s made it relatively easy for them to offer and deliver new products, though technology can’t do that alone. Well-trained bankers will ask the right questions. That goes a long way to ensure that the bank matches the right technology and products that provide the lift in efficiency that a business needs.

In what areas can a bank serve its customers more efficiently on the commercial loan side?

There are three areas of opportunity to provide speed in commercial lending: the origination process, loan documentation and loan servicing. When all three are done well, it leads to significant cost savings and efficiencies for both customers and banks.

What’s the key to originating a loan quickly?

To originate commercial loans quickly, bankers must get the information they need from customers promptly and then quickly steer them through an approval process. If a banker doesn’t let a prospect know exactly what’s required [typically three years of financial information], the loan application can be delayed.

Of course, a borrower’s delay in supplying information can also hold things up. When the proper information is available, loans can sometimes be approved in just a few days or less. In addition, many banks offer instant approval on some consumer and small business loans.

What about getting the customer the money he or she needs?

Once a loan is approved, loan documentation is required. Customers have the opportunity to influence how quickly this step is completed by providing their bank with important information, such as corporate resolutions and asset descriptions. On larger, more complex loans, experienced bankers can add significant value in steering loan document preparation duties to well-qualified transaction attorneys. A banker who remains involved in this process will ensure that attorneys draw up documents that accurately reflect the agreed-upon terms. That can save big headaches in the long run.

What’s the most critical factor in obtaining commercial credit quickly?

The relationship a business has with a bank and its banker. The days when banks averaged one employee for every $1 million in assets are gone. Today’s banks have far fewer. That makes it even more vital than ever for borrowers to get to know their bankers, especially when speed matters. All businesses have short- and long-term goals. A banker who truly understands a business’s strategic plan will be that company’s advocate throughout the loan application, approval process and funding. Couple that with a banker that can assist in providing other critical services such as a full range of treasury management products for example, and you have the makings for a great partnership.

TOM PANOS is president and chief commercial banking officer of MB Financial Bank. Reach him at (847) 653-1995 or