Glenn V. Godkin is president of community banking for Wells Fargo in Greater Houston. Godkin, who is in his 30th year with the company, is responsible for both regional banking and business banking activities in 125 stores with more than $8 billion in assets.
Q. What questions should a business be prepared to answer when talking with its bank?
Before a financial institution extends credit, it wants to be confident that a business has the ability to repay. Typically, lenders ask the ‘Five C’s of Credit’ questions that help the lender develop a profile of the applicant and determine whether to extend credit to a business. The ‘Five C’s’ are: character What is your history and reputation?; conditions How will the money be used?; capital How much of your own capital have you invested?; capacity How will you repay the loan? Is your cash flow sufficient?; collateral What forms of repayment security can you provide the lender? What secondary sources or assets are available to ensure payment?
Q. How can a business develop a strong relationship with its bank?
The relationship between you and your financial services provider is one that you both envision will last forever. Visit with your banker face to face for a thorough discussion about your goals, financial needs and company’s capabilities. You should expect to meet with your banker as often as you feel necessary monthly, quarterly or even weekly. Update your business plan throughout the year to address new opportunities and challenges and share changes with your banker. The more your financial services provider knows your business, the more they can help.
Q. What products and services should be expected from one’s bank?
Top financial services providers offer business customers the full of array of products, services and expertise. Depending on the business, services may include treasury management, merchant services, investment banking, corporate trust, international banking, payroll services and more. It’s important for businesses to receive a complete financial review from their financial services provider to determine the products and services that best meet their needs.