Many larger credit unions provide the same types of services that were originally provided only by banks (much to the chagrin of bankers, I might add). Although I refer to banks more often than credit unions in this chapter, most of what applies to one applies to the other.
My hope is that neither bankers nor those who offer small business services at a credit union will be offended by my offhanded use of the term “bankers” to describe them both. (However, I know that a couple of my credit union friends might have a thing or two to say about it.)
When my wife and I were first married, we were members of a small credit union that had only a few branches. The branch manager knew and trusted me. Whenever I needed a little extra cash, I could easily borrow a couple thousand dollars against my signature. Even though these types of relationships don’t exist much anymore, it doesn’t mean that building a good relationship with your banker is any less important.
Over the years, I’ve seen countless ads from major banks in my area and around the country claiming that, unlike the other banks, their bank takes their partnership with small businesses seriously. In all honesty, over the years I haven’t known too many bankers who treated me as a personal associate, but I’ve had the chance to work with a few.
There are a lot of smart business owners who, for one reason or another, are part of the group Coleman is talking about. That’s why so many bankers focus on credit score, time in business, and annual revenues. Those criteria are important, but your character and experience is becoming more and more important to many bankers. You need to make sure you put your best foot forward in that regard, too.
As mentioned earlier, most banks want a credit score of 650 or better, several years in business, and a fat bankroll before they’ll talk to you about a loan. However, there are some bankers who are looking for long-term relationships with business owners just like you.
Which Local Bank Is Courting Small Businesses?
As mentioned earlier, some banks are more interested in courting small businesses than others. Or, rather, some banks will be more interested in doing business with you than others. The trick is determining which banks they are. As promised, here are a few more suggestions to finding the right bank. Russakoff and Goodman suggest a few places where you might find banks that are courting small businesses. Treat your search for a bank much like a prospecting exercise. Start with a list, do your homework, and prepare to ascertain the information noted previously. Then narrow down your list to a few banks that look like a good fit, and interview them all before you make a decision. I call this the “Beauty Pageant method” and, much like the Miss America Pageant, the interview carries a lot of points. Here are some ways to build your list:- Talk to your business peers (Russakoff and Goodman suggest this might be the best place to look, and I agree)
- Ask your biggest customers where they bank
- Ask your suppliers, vendors, and other professional service providers where they bank
- Contact applicable trade associations
- Scour online resources such as ibank, sba.gov, LinkedIn, Lendio, or whatever pops up during a simple Google search
Never Forget: Banking Is a Business
While you’re standing in the lobby waiting for someone to help you, it’s easy to forget that banking is a business and you are a potential customer. I’ve met with bankers who tried to make me feel like I was fortunate they were even talking to me. The truth is, regardless of how big the bank is or how small your business is, one of the biggest challenges facing many bankers every day is finding new customers.As mentioned earlier, most bank marketing is old school. When looking for new business, many bankers rely on a referral network of CPAs, the Chamber of Commerce, insurance agents, and traditional marketing like billboards, radio, and the events they sponsor. When you go into the bank to open an account or to apply for a loan, they are looking for good customers every bit as much as you want to be one.
Remember, even though you are going to be the bank’s customer, you need to make sure you put your best foot forward. I don’t think that means you need to wear a suit and tie or your Sunday best, but you do need to look professional, have your financial records in order, and be ready to make them salivate to do business with you.
Bank, Financial, Loan
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