Understanding Your Bank, and Building that Relationship

Before I launched a trucking invoice factoring company, I was a commercial banker for 32 years.  I loved every minute in the banking business, from my first day in a teller window, to my last day as a CEO in a Board Room.  Here are my top 4 recommendations for building a strong relationship with your bank.

  1. No surprises – Bankers hate surprises. No overdrawn accounts, no late payments.  For borrowers, no wildly different financial statements than the last one you sent in, without some warning.  This may seem like basic, simple advice; but it is more important than you think.
  2. Don’t assume you know the “rules” – Business people remember their experiences with banks over the years and think they know “how things work” behind the scenes. But the banking business has changed dramatically in recent years.  Assuming you know what you can expect is a very big mistake.  Ask questions like you don’t know how things work and give your bankers a lot of lead time to address your needs. 
  3. You should respect your banker – But don’t expect to be working with the ultimate “decision maker”. Banking is a very heavily regulated industry.  Risk management disciplines at banks have led to a variety of models for decision making, and they are always very objective. If your banker is responsive and candid about their bank’s standards and processes, you are on the right track.  Help them learn as much as possible about your business, without being annoying.  That will pay off.
  4. Pricing is relative – A strong relationship with your bank takes years to build. In my experience it is rarely about price.  I recommend you ask for the best terms your bank can offer for what you need… and accept those.  In many business relationships, it is about pricing.  Banking is not one of them.

Our business is heavily reliant on banks… I’m glad I speak their language a little.  If you need help building, or fixing a relationship with your bank, give us a call.

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