Has your business outgrown your bank?

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Companies are like people—they can change, for better or worse. Are your financial partners growing alongside you or is the relationship stuck in a rut, with each annual review simply a roll-over of the prior year’s facilities?  If you answer yes to two or more of the following questions, you may have outgrown your bank:

  • Have you had multiple account managers in the past two years and had to re-educate each of them about your business?
  • Have your business needs evolved beyond your existing banking facilities?
  • Is your financial institution unable or unwilling to address your changing needs?
  • Do you need more money than your financial institution is comfortable lending?
  • If you’re in a challenging economy like Alberta, is your bank supporting you, or is it reducing availability?
  • Are you subject to a forbearance agreement or has your financial institution asked you to seek alternate financing?
  • Do you feel you are paying too much for services received?
  • Does finding a financing solution feel like pushing a square peg into a round hole?

A good banker can be an important partner to your business. A bad one can be a time consuming distraction or an impediment to growth. Below is a list of what is reasonable to expect from a great bank and account manager.

  • Your banker is willing to sit down with you and listen to your plans for the future and shows an interest in learning more about your business and industry.
  • S/he proactively engages you in regular conversations and shares relevant business advice.
  • S/he helps optimize your financing by:
    • recommending an appropriate capital structure;
    • ensuring you are making the most of the financial products available; and
    • confirming you have access to sufficient capital for the next 12-18 months
  • If you do business internationally, s/he has the required expertise, and it’s a plus if the institution has operations outside of Canada as well.
  • A portfolio of services and products, such as asset-based lending, cash management, currency hedging and trade finance.
  • You should feel confident that your needs are being handled by the most appropriate group within the bank as there are differences between the sweet spots and risk tolerances of different teams within the same financial institution. Some teams specialize in certain industries, while others’ expertise is more product-based.

What do you do next if your banking relationship isn’t working for you anymore?

  1. Talk to your current bank, as a different account manager or product team could meet your needs without having to switch to another institution.
  2. Get recommendations from trusted contacts in your network. Look for an industry expert or someone who is great to work with.
  3. Interview banks and account managers as you would any other partner: Is there a good fit? Are they experienced in your business or industry?
  4. Consider supplementing your current banking relationships with additional partners who can provide incremental advice and products.

A great banker should add value to your business and grow with it. If this is no longer the case, consider the tips above in order to find the best fit for your company.