How to expand your existing banking relationship Featured

8:00pm EDT May 26, 2010

As every business owner knows all too well, you can’t do it alone. You’re constantly out in the field making new relationships and bolstering existing ones. However, one of your most valuable relationships — one that often gets ignored — is the one with your bank.

Regardless of how satisfied you may be with your current bank, it’s always a good idea to “interview” your banker, if for no other reason than to ensure your banker knows your business goals and objectives for the future.

“It’s always a good idea to keep up regular contact with your banker,” says Trina Howard, a relationship manager and vice president with Wells Fargo Community Business Banking. “You can discuss your business’s goals and your banker can determine what the bank can do for you. These meetings often lead to new and unique opportunities you probably never even thought of.”

Smart Business spoke with Howard about having regular meetings with your banker and how those meetings can lead to expanded banking relationships.

What makes a good banking relationship?

The key to a good banking relationship is one involving mutual confidence and trust. You want a banker that has an unsurpassed knowledge of business products and is available to solve problems quickly. Having a collaborative professional banker who always has your best interests in mind will give your business a competitive advantage.

Always stay in contact with your banker — in good times and in bad. If you’re having an issue, if you get a new contract or make a big sale, let your banker know. Good, bad or indifferent, your bank needs to know what is going on with your business. Your bank can offer you a world of service if you just ask.

Why is this relationship so important?

Obviously, you want a banker that truly cares for your business — someone who has a genuine interest in its progress. When you invest in a long-term relationship with your banker, he or she will understand the ins and outs of your business and thus be able to quickly, effectively and efficiently respond to your needs. Good business bankers value and reward open and honest two-way communication, hold themselves accountable and only make promises they intend to keep.

How can a positive banking relationship help a company grow?

When your business banker intimately knows you and your business, he or she will be aware of your immediate goals, as well as your long-term goals, and can assist you with a variety of products to ensure your growth and prosperity through many economic cycles. Your banker’s expertise and advice is a valuable resource that’s often left untapped. Whatever you want to do — launch a new line of business, expand into new territories, do business overseas, etc. — your banker has probably done it before. This person can share his or her experiences in those areas and help you avoid some of the mistakes or missteps that are inherent in a new venture.

Bottom line, your banker should be with you during the good times and the bad. He or she will be responsive, consultative and solutions-driven to help you grow.

When looking to expand your banking relationship, what are the first questions to ask your banker?

With the recent changes in financial institutions and the volatility of the financial markets, the first thing you should ask is: How safe and sound is the financial institution? Other questions to ask might include: What banking or financing products are available to support my short- and long-term goals? How can the bank support my business’s needs based on projected growth? Does the bank provide a cohesive set of services that address my business’s diverse banking needs?

What are some different or unique banking services that business owners may not know about?

Many banks offer a wide range of products and services that customers are usually unaware of, including 401(k) planning, asset based lending, foreign exchanges, specialty physician financing through MATSCO, factoring, business evaluations, workplace banking, private banking, wealth management services and cash flow management.

If business owners are happy with their bank, why should they expand their banking relationships? Are there consequences to keeping with the status quo?

It is always beneficial to allow business bankers to review your business’s current services and products to determine if they are deriving full value. It may be determined that alternative products could save you time and money. Even if your company is healthy and growing, it may be beneficial to expand your banking relationship. Again, it’s all about communication. Your bank needs to know you, your business and your industry, and understand the complexities and challenges of it all. In turn, you need to understand the bank’s expertise and its limitations. There’s not necessarily a consequence to keeping with the status quo, but if you’re not constantly and consistently communicating with your banker, a disconnect will surely occur and you could end up missing out on some great opportunities.

Trina Howard is a relationship manager and a vice president with Wells Fargo Community Business Banking. Reach her at (281) 282-2206 or trina.howard@wellsfargo.com.