As a business leader, building a strong relationship with your bank is critical to the success and growth of your company. Your banking needs may change from time to time based on market opportunities and the challenges you face, and maintaining credibility is essential if you want to ensure that your bank will be there to meet your needs. Following are four tips to enhance credibility with your bank and help increase the odds that your bank will be there for you when you need it.
1.Communicate Frequently
Always keep the bank in the loop. You should be open and honest with your lender, sharing good news and bad. Bankers do not like surprises. If you have concern about the company's ability to comply with loan covenants, communicate the issue immediately. Don’t wait until you are desperate to let the bank know about problems. As your partner, they can offer you solutions to help address the problems. Open and prompt communication with your bank builds trust and credibility.
2.Do What You Say You are Going to Do
When the bank requests your business plan or projections for the year, provide realistic targets. Consistently providing best-case scenarios but routinely falling short of those expectations may cause the bank to lose faith in your ability to provide reliable forecasts. Instead, provide forecasts that you are reasonably confident you can achieve or exceed. After building a consistent track record of doing what you say you are going to do, the bank will become more confident in your projections, enhancing your credibility.
3.Be Accountable
Demonstrate a commitment to grow your business and execute a strategic plan. Whether you are successful executing that plan or you encounter bumps in the road, be accountable for those results and take ownership of the situation. More importantly, the bank will be impressed if you come to them with sound strategies to address any problems you encounter.
4.Listen To Their Advice
Both you and your bank have a common interest—the success of your business. As a result, you should look at your bank as a strategic partner and listen to their advice. As your banking needs change during growth phases or business cycles, your banker can offer insight and suggestions to help you achieve your goals.
Following these four tips can strengthen your banking relationships, ensuring that you can meet your business’s financing needs over the long haul.
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