It was one of the most stressful times of my life. I had just built a new house, we had our first child who had colic, I was trying to run a new business that was not meeting its financial goals, I had staff challenges, and my banker was calling me every day.
When things are going well, your banker might be your best friend, he or she might go for lunch or even a round of golf with you. However, when things are financially challenging, you might rather bury your head in the sand than reach out for a friendly chat or a hug with your banker. Yet, that is exactly what you should be doing. (Well maybe a hug might be too much).
In recent months I have met with quite a few commercial bankers in my role as a realtor focused on selling businesses and commercial properties. Those interactions have been surprisingly frank and open. I have discovered that every bank has different ways of dealing with risk and a different idea of what might be risky or not risky for them to get behind. Let's face it. While it might be your investment, it's the bank or credit union’s money that is on the line. Yes, admittedly you have some skin in the game and at the end of the day you are going to be the big winner or big loser based on how your investment turns out.
Your banker wants to meet regularly with you to gauge how things are going. Yes, they want to hear about your opportunities and your successes but they also want to know about your challenges and how you are dealing with them. Just because you share with them that you are stressed because your receivables are growing, doesn’t mean that they are going to call your loan. In fact, this is probably exactly opposite of what they want to do. Your success is their success and they may have some very good options or ideas for you to help with your cash flow. While this might include lines of credit that benefit the banks, it might also be some savvy advice on how you might implement a system to improve your accounts receivable collections.
Your banker has a vested interest in you paying your obligations to the bank. Not only does it make them look good but they then have a great track record to lend you more money based on your history with the bank. Banks need to lend money to make money. Having a strong relationship with a business owner like yourself enables them to feel more comfortable when lending you money.
There are many reasons why you should develop and foster a relationship with your banker, but the most important is that when times are tough you have someone safe you can trust to talk to. People do business with those who they know, like and trust and this includes your banking professionals. It is difficult for them to know, like, trust and hug you if they haven’t met you or don’t have any relationship with you. Start today by reaching out to your banker and building that relationship that might benefit you for years to come.
Dave Fuller, MBA, is an Award-Winning Business Coach, Author and Commercial Realtor. Comments, Questions or Hugs? Email dave@pivorleader.com