A good bank lending officer can be an entrepreneur's most important ally. Yet most fledgling entrepreneurs have unrealistic expectations of their banker.
Expect your banker to play it by “the book.” “The book” divides your business entity's history into two segments: 1) before two years of successful operation; and 2) after.
To the uninitiated, dealing with a banker during their first two years in business is an exercise in frustration and futility.
So during your first two years of operations, how do you maximize the value of your banker? What can your banker do for you that can really make a difference in the financial health of your budding enterprise? PLENTY! Just not what you initially had in mind.
If you have selected your banker wisely, he or she has a title at the bank that identifies him or her as a specialist in the industry of your business (i.e. apparel industry, farming, emerging technology, entertainment industry, travel industry, etc). The bank (and specific branch) you have chosen should be known as a player in that industry. Ideally, your banker is someone with whom you feel comfortable discussing your business needs and building a long-term relationship. You want a banker who will take a personal interest in you and your business goals and who will be responsive when you ask for the following assistance:
1. An introduction or referral to one or more CPA's (Certified Public Accountants) who specialize in your industry and who have connections to help build your customer base, expand your access to quality cost-effective suppliers and even help you identify competent employees, and funding sources for your early stage business.
2. An introduction or referral to one or more attorneys who are known and respected for their work in your industry and who have connections that may be of value to you.
3. An introduction or referral to one or more industry-specialized asset-based lenders or factors that can help finance your early cash flow needs.
4. An informal but direct introduction to potential suppliers and customers for your business. This may be slow in coming, but will occur with your banker’s earliest exposure to the viability of your business.
Because your banker plays by the book, he or she will tell you that bank policy prohibits them from referring you to any of the individuals described above, but will usually follow that with an offer to refer you to several sources from whom you can then select after doing your own due diligence.
As your first two years progress, an occasional lunch with your banker can yield even more leads to other resources for your business. In the meantime, you’re building that relationship which can open the bank's vault after your business passes the two year barrier.
This is just one of dozens of great business and financial strategies that I teach in my online Bizar Financing course. Check out my free online video Getting Rich Your Way and see how other entrepreneurs are using my strategies to start, buy or expand their own successful businesses using little or no cash of their own.