Our business consultants possess a depth of expertise like no other. George Jacobson, the Director of the Minneapolis MBDA Business Center and Edgardo Rodriguez, one of our business consultants provided some information on how to maintain the relationship you have with their bankers.
George and Edgardo said that currently 95% of their days are spent communicating and working with clients who are curious how to navigate the quickly changing economic landscape. One piece of this landscape is focusing on the banking relationship you have with your banker.
A great quote from the Society of Actuaries explains the importance of having a strong banking relationship, especially during hard times – “Having a bank in your corner, can spell the difference between success and failure in creating a solid business and in having the flexibility to manage and guide it no matter what the business climate throws your way.”
When building on an existing banking relationship, the first questions you should be asking are related to your business’ banking needs:
- Is your business B2B, B2G, or B2C?
- How many employees do you have?
- How much revenue is coming in?
- What geography does your business serve?
- What kinds of payment transactions do you process? i.e. check, cash, credit cards, electronic payments, or wire funds transfer.
- What types of fund management services are required for your business? i.e. checking accounts, payroll and other types of deposits, online banking, term loans, lines or letters of credit, etc.
Once you have established your banking needs, focus on strengthening your financial reporting.
Important information to share with your banker is your cash flow, balance sheets, assets, receivables, and payables. Timely and quality financial reporting is key to a banker understanding your business’ needs. Enhanced reporting may be needed depending on the type of business model you operate. Clearly explaining your business to the banker will help them understand and be able to find the types of credit facilities they can offer you in response to your financial needs.
After being able to maintain a banking relationship for over several months or years, bankers will better understand your business. This will allow them to assist you with the best loans that may be applicable for your business. Particularly in the time of COVID19, you need a certified lender who can help you with the process of applying and obtaining interim capital through SBA loans.
George says that a banking relationship is much more than just the lending piece, but lending is currently the most important part of the relationship. Particularly, if a business is trying to obtain interim capital during the pandemic.
George and Edgardo also mentioned that proactive communication is key in maintaining a strong relationship with your banker. Keep your banker informed as your business evolves. Meet with your banker frequently. This will help them to pivot as your business changes.
Communication with your Meda consultant is also key at this time of rapid change. Keeping your consultant informed will help them to advise on your financial needs and become better prepared for new credits and resources.
Planning and Managing Your Banking Relationship During COVID-19
Lending Relationships: Managing Through Coronavirus Concerns:
Five Strategies for managing your lending/banking relationship