13 Steps to Protect Yourself from Your Bank

The success of your business is critically dependent on how well you negotiate and manage your financial partners. Banks, investors, credit cards and financial services companies work for you. Therefore, you need to be sure you are working together, understand the plans of each and have the best idea of what and how things will happen when times get tough.

It is very simply like dating, and you need to be acutely aware of how words, actions and contracts meld together to form a base for your business structure to build on.

1. Ask for resume of your loan officer and if a small community bank the resume(s) or work history of the principals. Banks have one of the fastest turn over rates and as the industry continues to consolidate, so people are moving fast. It's not always the bad ones that move on, there are actually good folks that get snapped up by the private sector. Know how often they move, and where to and where from. And, ultimately, if you can go with, assuming the relationship is good.

2. Ask to meet 2 to 3 levels up. Loan officer's boss, senior vice president of commercial lending and again, in small community banks, a principal. If your bank contact shows up missing, you have a critical issue that you most likely don't have the time to deal with now.

3. Ask for references of businesses within you range loan, and/or business type. If they won't give you the other companies' name, ask them to have their clients call you. Make sure they are similar in size, industry and financial requirements. Be prepared to ask tough and pointed questions to uncover the real types of people you are dealing with to determine what it will be like beyond the honeymoon stage.

4. Ask for their standings in state and federal regulator groups including FDIC. Be aware that in many cases it is against regulations for bank employees to tell you they are in trouble. Get the history and then follow up on the FDIC website and state banking authorities. These groups may ultimately decide what the bank can and can't do with account.

5. Ask what happens when times get tough. Blow up the bomb, talk about the worst case scenarios and get the reaction of how your bank will handle a takeover, regulatory change, or a late payment.

6. Request the financial intuitions' long term plans. Sell. Merger. Growth. The bank wants to know your long term plans and how they can be part of it. Shouldn't you know what they are planning on doing? If they are going to buy up other banks, or be bought? What happens to your great (or mediocre) bank relationship? Ask often and frequently where the banks see themselves going in the community and within their industry.

7. Draw up a close-out plan if you want to direct the process. If you hold special permits or plan to be involved with your company to the bitter end, figure out how that will be handled. Discuss and get agreements with your financial partners.

8. Invite Board of Directors to your business. Not only are they powerful allies with your bank they are often influential in the community. The more you develop the relationship, they more they can be aware and helpful in moving your business forward, in and outside the bank.

9. Sign any amendments to loan security agreements at the same time you enter into a loan relationship. Neither should be determined to be of more importance if you are going to create an equal and balance long term relationship. Nothing should be an additional or an oversight but one complete and equally negotiated agreement.

10. Request quarterly reports on changes within the bank. Read them and ask questions about what they mean to you and your business relationship.

11. Demand annual updates on areas that blend your business and your business services. Are they adding services to benefit you or cutting areas that will be vital to the growth, profitability and success of your business.

12. Recap all meetings and phone conversations in writing and copy supervisors in your company and at the bank. When times are good, you want every one to know it. And when you need help or relationship begin to gradually, or like a sudden summer storm, explode, you want your communication and your plans to be exacting, detailed and with a concise trail.

13. Continue to meet with other institutions and don't consolidate your business.

Margaret E. J. Broderick has an undergraduate in communications and an MBA in Strategic Marketing and Management. Her last company was a two-time Ernst and Young Entrepreneur of the Year Finalist. She is the author of Passion v. Arrogance: A Dana and Goliath Story of Wine Women & Wine, and continues to tour the country to educate audiences. She can be reached at http://www.passionpowerpress.com, or passionbooks@aol.com

---

What Help is there for Veterans Starting a Business?

Some of the very qualities that attract people to the... Read More

Small Business Opportunities Magazine Business

A Small Business Opportunities Magazine is one of the new... Read More

Franchising in The Middle East There Will Bring Significant Opportunity for US Based Franchisors

As stability emerges in the Middle East there will be... Read More

A Look at Incorporating a Business in Florida

As you may know, there are many ways to incorporate... Read More

Tips on Setting Up Your Small Business Bank Account

One of the first things you will need to set... Read More

How to Define Business Objectives

Why does a good business relationship rely on having some... Read More

Obtain Maximum Results For Your Small Business Through Better Time Management

Most small business owners are faced with so many responsibilities... Read More

How To Get Slightly Famous in Print

Early in my career, I wrote an article for a... Read More

Finding a Venture Capital Firm

Many ventures are faced with the challenging task of raising... Read More

Sex Up Your Business Growth

A top executive called up me late in the night.... Read More

3.5 Million People And A Possible UK Home Business Opportunity

Has this ever happened to you... 'John, you have a... Read More

Want to Grow Your Business? Make an Irresistible Offer

My clients and many of my readers are small and... Read More

Nevada Incorporation: The Advantages of Incorporating in Nevada

Incorporation in Nevada has become an attractive option for savvy... Read More

Simple Business Tactics Are Your Key To Success

In a world full of complications sometimes we overlook the... Read More

Temporary Staffing Agency: How to Start

The temporary staffing industry continues to expand, with yearly double-digit... Read More

5 Good Reasons a Self-Employed Professional Should Take Vacation

So you think you're not justified in taking time away... Read More

Increase Profits With a Small Investment of Time and No Money

The less a business pays for goods and services the... Read More

So You Don?t Believe in Outsourcing

Entrepreneurs are hardy stock. But sometimes hardiness can get you... Read More

Five Tips for First Time Entrepreneurs

It seems so long ago that I started my first... Read More

Looking for a Business to Run in the New Revitalized Downtown Area?

Looking for a place to add a Quick Lube away... Read More

Fleet Washing Expansion Considerations

Many times small businesses want to expand their businesses and... Read More

Two Types Of Business Plan Cover Pages ? Which One Are You Using?

This is the tale of two business plans with very... Read More

Freelance Tips: How to Cope with Spring Fever When Theres Work to Be Done

We all know how glorious those first warm days of... Read More

The Advisory Board: A Business Owners Most Valuable Resource

As a company grows, the owner's role begins to change.... Read More

How Your Habits Control Your Small Business Success

Habit: A consistent behavior you perform so frequently that it... Read More

Most Franchises Are Small Home Businesses

Many of our nations 400,000 franchisees run their businesses out... Read More

Small Business Failure? Nuts!

Pardon my enthusiasm, but a large part of your small... Read More

Small Home Business: Ad Copy Secrets

So it's time to invest some finances into advertising your... Read More

Predicting Business Retirement Satisfaction for Business Owners

Most business owners do not think of selling their companies... Read More

Over Disclosure Hurts Businesses

Many investors and business ethics professionals are calling for more... Read More

Incorporating a Small Business: S corporations versus C corporations

If you've been considering incorporating your small business, you've probably... Read More

Do You Love Food? - Then Maybe Opening a Restaurant is Not Such a Crazy Idea

The restaurant industry in the United States employs an estimated... Read More

Technology Community Helps SMBs Focus on Their Core Business

If you're starting your own business or currently work for... Read More