Business Loans – Knowing Your Banker
Most business owners think that a bank is a place to go to only when they need to borrow money. Though a bank is certainly obligated to review your application process even if you walked into a bank for the first time, you will have a much better chance of being approved if you had a prior relationship with the bank or the bank manager.
To understand this a little better, you will need to be reminded about the simple economic principles that makes banking possible. Banks, just like any other business, need customers. Their customers are predominantly made up of savings and checking account holders who deposit money into the bank on a temporary basis. When the banks receive thousands of these customers, they will start to build up a capital or a reserve which they can then lend out to businesses. They also use the deposits to invest in various securities which will make them money.
Thus, when you walk into the bank for a loan application, one of the first things you will be asked is if you are a customer with the bank. If you are, you will be greeted warmly. If you are thinking about getting a business loan in the future and have a particular bank in mind, it will greatly help your cause if you went to that bank today to open a savings or checking account. Also, ask for an appointment with the bank manager to discuss potential investment options with the bank like money market accounts of certificates of deposits. The bank will also offer other useful services such as credit card processing brokerage and cash management. Sign up for one of those services and keep a good working relationship with the bank for at least a period of about six months or so.
You can then approach the bank for that business loan you need and you will be surprised at how well you are treated. There is no guarantee that they will approve your loan just because you are a customer. That being said, a banker might be able to look at your application, point out weak areas and then resubmit your application in a manner that gives it the best chance of being approved. Having a banker on your side is worth its weight in gold.
The days of sealing a deal with a handshake have passed for the most part and that is unfortunate. This doesn't mean personal relationships still can't be of huge help to getting things done in business. This is particularly true with your banker.
To understand this a little better, you will need to be reminded about the simple economic principles that makes banking possible. Banks, just like any other business, need customers. Their customers are predominantly made up of savings and checking account holders who deposit money into the bank on a temporary basis. When the banks receive thousands of these customers, they will start to build up a capital or a reserve which they can then lend out to businesses. They also use the deposits to invest in various securities which will make them money.
Thus, when you walk into the bank for a loan application, one of the first things you will be asked is if you are a customer with the bank. If you are, you will be greeted warmly. If you are thinking about getting a business loan in the future and have a particular bank in mind, it will greatly help your cause if you went to that bank today to open a savings or checking account. Also, ask for an appointment with the bank manager to discuss potential investment options with the bank like money market accounts of certificates of deposits. The bank will also offer other useful services such as credit card processing brokerage and cash management. Sign up for one of those services and keep a good working relationship with the bank for at least a period of about six months or so.
You can then approach the bank for that business loan you need and you will be surprised at how well you are treated. There is no guarantee that they will approve your loan just because you are a customer. That being said, a banker might be able to look at your application, point out weak areas and then resubmit your application in a manner that gives it the best chance of being approved. Having a banker on your side is worth its weight in gold.
The days of sealing a deal with a handshake have passed for the most part and that is unfortunate. This doesn't mean personal relationships still can't be of huge help to getting things done in business. This is particularly true with your banker.
Source...