The relationship between a banker and a businessperson is like many others — it requires trust, teamwork and shared goals to be truly successful. As a businessperson, it’s important that you do everything possible to keep things running smoothly in the relationship for your banker. Keep in mind that your banker has a boss, too, and they both have requirements and responsibilities to meet. Helping him or her meet those duties will go a long way toward strengthening the relationship. Some of the things you can do to make your life easier include:

• Understand how the loan approval process works – if you ask,
  they will tell you. Understand what is required for a loan
  package and the timing. Never be in a hurry, but always have a
  good sense of urgency.
• Always furnish reports as required, on time.
• If your insurance lapses or you have other items that trigger
  scrutiny, cure them IMMEDIATELY (as in hours if possible,
  bankers love it when you have a sense of urgency).
• Always speak to other bank employees, make sure they know
  who you are and that you are a “good customer.”

Lesson No. 1 – Making Your Banker Look Good

Ron: Bankers have to meet certain requirements and it’s the customer’s responsibility to help them do that. Bankers have a fiduciary responsibility to the bank and they have examiners who come in, look at what they’re doing and criticize it, bless it, or whatever. So as a businessperson, it’s important not to do things that could get the banker in trouble. I’d say the first thing is that the customer has to deliver their financial statements on time. By the way, think about this requirement when you make the loan. Don’t set yourself up for a frequency or timing issue with the statements. Bankers understand that it can take some time to close the books, etc., so ask for reporting requirements that you know you can exceed. Deliver them early. Then they are never on his list of exceptions! And don’t kid yourself; they know when your loan payment is late also.

Greg: That’s huge. The No. 1 flag on accounts is when a payment is past due, so don’t ever let your payment be late. A lot of people will make their payment on the day before a late fee is due — don’t do that! If your loan payment is due on the first, make your payment on the first, not when you’re going to get hit with a late fee. Pay it on day one, every time. I have a report on my desk – as does every loan officer – showing which customers are one or more day past due. The next day it says they are two days past due. Don’t think they don’t know. The same report shows them your collected balances the same day. What do you think the banker thinks when your payment is one day late and your checking account balance is low?

Ron: And if you’re going to be overdrawn, you should never be overdrawn on the last day of the month. You can be overdrawn every day of the month, which is terrible, but if you are overdrawn (also known as “in the cuts”) on the last day of a month, you are on a report the directors and examiners see. This also applies to past due loan payments.

Greg: You should never be overdrawn, period. Being overdrawn and being past due are two big red flags.

Ron: A banker once told me that a lot of customers don’t think it’s a big deal to be overdrawn, but here’s why it is: All customers who are overdrawn don’t go bankrupt, but all customers who go bankrupt were overdrawn. So the point is, it’s a red flag that may precede a failure.