I had lunch with one of my favourite bankers today. He’s driven to help his clients be more successful. We’re a great fit.
We have a significant mutual client so there is a strong need for a good working relationship, mutual trust and shared long-term vision. I think we have this foundation. You can tell by the level of conversation you’re having and how tough the questions are.
I used to joke that there were two kinds of bankers: lenders and collectors. Seriously, I think there are still two kinds of bankers: strategic partners who establish relationships and focus on long-term growth; and transactional bankers who are focused on the short-term, provided you fit their scorecard.
In my work with three clients recently and helping them source financing, two of the three clients have switched their main banks. Their incumbent bankers had weak relationships with the clients and weren’t interested in long-term growth. It seems they’ve replaced human interaction and judgement with a strict score sheet that marks businesses as pass/fail.
I wonder if industry flavour or banker mistakes in other parts of the country is tainting their appetite for lending.
I’ve heard bankers say they would lend $100,000 if the owners invested $100,000 into the business and the bank would hold the investment as collateral. That’s not banking. That’s crazy.
Banks can only lend based on their reserves and deposits. Maybe the crazy bankers aren’t crazy but don’t have the deposits to support lending. That would make more sense and they should just say that instead of insulting everyone’s intelligence and hurting their own brand.
Here are the signs of a good banker, with all new updates from my previous article:
- They treat you with respect, take an interest in your business, and respond quickly to your questions or concerns.
- They read your business plan, ask questions about your projections, and give you advice on how to structure or improve your financing request.
- They talk about other deals they’ve structured recently (which shows they are in lending mode) -in generic industry terms that protects client privacy (all bankers I’ve met at very good at this).
- They’ve been in their position for a while and don’t rotate every six months.
- They attend business, social and networking functions and want to be active in the community.
- They value referrals from you.
- They send business to you and help you to promote your business within their networks.
- They connect you with good people that will help you be more successful.
- They have a sense of humour and some perspective when things don’t go according to plan.
- They are willing to build a long-term relationship with you.
There are lots of great bankers out there. If you find one, keep him or her, because they will help you become more successful.
Copyright 2011. All Rights Reserved. Phil Symchych