Forging a relationship with your banker can pay huge dividends. By openly and frequently communicating your business needs, you allow your banker to become more proactive and less reactive. A collaborative banking relationship benefits all parties involved: Companies receive the support they need and bankers have the opportunity to offer targeted banking solutions.
In order to fully take advantage of your bank’s products and services, it is important to meet with your banker on a consistent basis and provide as much information as possible.
“I’ve never heard of a situation where we had too much information the more the better,” says Melissa Pollard, senior vice president and group manager of Comerica Bank’s North Orange County Middle Market Group.
Smart Business spoke with Pollard about establishing a personal relationship with one’s banker, how to prepare for banker meetings and what type of service and performance standards should be expected.
Why is it so important for business owners to establish a relationship with their bank?
Establishing a relationship with one’s bank is very important because it adds color to the business owner’s situation. We have the benefit of financial statements and quantifiable information, but it’s the qualitative information that we gain by getting to know the business owners and senior management. In fact, when we make credit decisions, one-fourth of our assessment is based on management. From a banker’s perspective, it is important to have a relationship with a company’s key individuals so we can effectively rate management and make proper evaluations.
How often should business owners meet with their banker?
It really depends on the business. As bankers, we try to tailor our approach based upon the client’s preferences. There are some clients that love to meet monthly or, during the throes of a transaction, even weekly. Other clients prefer a quarterly approach. We strive to be proactive and upfront in asking what type of schedule best meets our clients’ needs.
How should a business owner prepare in advance for a meeting?
A meeting with your banker provides the opportunity to showcase your accomplishments over the past quarter or however many months it has been since the previous meeting. In order to make the most out of a meeting, it is important to have specific objectives in mind. This can range from helping your banker get his or her arms around a new business opportunity to discussing your recent projections.
Bankers don’t like surprises, so the more information the better. Being proactive and sharing as much information as possible helps us to anticipate future needs. It is so much easier if we know in advance that a client may miss one of the bank requirements because then we have the opportunity to modify or alter the requirements to keep that client within compliance.
What type of information should be brought along?
If it is a brand-new company that we’re still trying to get to know, it is important to provide historical information and the background on key managers, including resumes or business biographies. This allows us to have an understanding on how the company has evolved over the years and possibly over different generations.
If it is an existing client, we already have the benefit of this historical information, so we need the updated financial performance relative to the client’s business plan. Also, it is important to provide qualitative information that rounds out the numbers and enables us to see what is behind the obvious mathematics. A business might think it is bringing in too much information and will bore their banker, but there can never be too much information.
Who should be present at banker meetings?
It depends on the size of the company. With some companies, we deal with the business owner and/or CEO, which can be the same person. But sometimes it is the CFO that we are working with on a regular basis. If the CFO makes the final call in regards to financial decisions, then developing a strong relationship with that person is just as critical as it is with a business owner or CEO.
What type of service and performance standards should owners expect from their banker?
They should expect the same standards that we enjoy from our clients, which include being able to undercommit and overdeliver and being a business partner through thick and thin. It is easy to provide banking products and services when factors are very favorable, but our most loyal of relationships have been solidified during situations where there have been bumps in the road.
Bankers should stand behind their client and give candid feedback in terms of what they can and cannot do. If it is something that truly does not fit their area of expertise, they should do their very best to refer outside resources. And the relationship works both ways. By providing candid information and being forthcoming about their business challenges, clients will make it easy for their banker to service their needs.
MELISSA POLLARD is senior vice president and group manager of Comerica Bank’s North Orange County Middle Market Group. Reach her at (714) 940-6751 or firstname.lastname@example.org.