How important is your banking relationship when growing your business?
If you want to expand your business, one of the most important people you’ll need in your corner is your banker.
The more your banker knows about your business, the better. An annual review of your business plans, financial statements and tax returns can equip them to provide guidance and services that help you meet your goals. The value of strong banking relationship can translate into:
More favorable interest rates and loan terms - Owners with strong banking relationships are often offered better interest rates, loan structures and terms than those who walk in cold off the street. Higher rates on deposits are also possible, especially as your relationship expands and the value of your deposits grow.
Fewer or lower fees - While banking services aren’t free, you may be able to negotiate lower fees on loans and other products by consolidating all of your accounts and services with a single bank.
Improved cash flow - As your business grows, it may benefit from services that speed up the collections cycle and payments systems that allow you to hold cash longer. A banker who understands your cash flow needs may be able to guide you to options that address them.
Strategic planning insights - A banker who understands your financial history can be helpful when planning your business’ future. Likewise, you will be in a better position to jump on opportunities if you know your borrowing capacity and interest rates ahead of time. Your banker’s analysis of your debt ratios, receivables and other financial data can help assure your financial results align with and support your vision.
A strong banking relationship can go even further, sometimes opening doors to the banker’s own network in the business community. In fact, owners who fail to maximize these banking relationships may miss a variety of opportunities that could support their success.