I am always surprised when I talk to our banker and realize how much he knows about business.
Not just banking and finance, but actual business. He asks great questions – the kind of questions that make me think about how we are running our organization – and he is genuinely interested in the answers to those questions.
Think of your banker as a free business consultant, and as a bonus, they happen to be able to lend you money.
You may be surprised at the solid guidance they provide or at a minimum they can act as a sounding board for business problems you are wrestling with. Your banker can bring a fresh perspective to your business. They are not buried in the minutiae of day to day problems like you are. They are not jaded by the countless attempts to fix a problem and countless failures, like you are. They bring a (mostly) objective view and perspective to your business.
Your banker is your business partner. When you think of them this way, and not just as the person that lends you money, you will open up new opportunities to learn.
When you share information with your banker, and share your business strategy, you are educating them on your goals. You are letting them in on your business hopes and dreams. They want to see your financial statements and review your sales trends so they can better understand your business, and go to bat for you when the time comes.
If they have the detailed knowledge, they will be able to sell the loan to their boss, and loan committee. This, combined with the relationships you’ve built with these bankers higher up the food chain will go a long way towards getting the loan terms that you want.
But there’s always a catch. Your banker is, after all, a very cautious fellow. He loves to protect himself, and the bank from bad loans.
He does this by using both ‘belts and suspenders’. In other words, if you want to keep your pants from falling down, you put on a belt, and you also put on those suspenders. The equivalent for your banker might be getting collateral to cover the loan, plus a personal guarantee from you in order to be doubly sure the loan is solid.
Take advantage of the knowledge and experience of your banker as a business partner, but remember who you’re dealing with (Mr. Belt and suspenders). He’s more than just a guy with a bad golf swing and a credit card to cover post-round drinks. He can add some value. Invite your banker under the tent. Listen, learn, and get that loan just the way you want it.