n Does your bank offer back-up employees to stand in when your primary contact is away
from the bank? Make sure that you personally know each of the responsible employees. I
believe that banking in person develops relationships much faster than banking solely on-
line. Since you can't always count on having the bank manager at your fingertips when you
need him or her, it's good to get to know the regular staff, remember their names, and ulti-
mately have an entire bank branch on your side.
You can go one step farther and open an account at another bank as a backup. In the be-
ginning it may be tough to get a large credit line without some business traction, but since
you're in for the long haul, when the time is right having a little competition between banks
may be the key to your financial freedom.
n Find out if and how your banker is taking your total banking activity into consideration
when your interest rate is established. You have checking accounts, deposit accounts, sav-
ings accounts, your merchant account, and possibly even a payroll account in your main
bank. Make sure that your banker is basing your business value on your total relationship
when setting your interest rate and loan terms.
Banks make loans by balancing risk and reward. When you request a loan the bank identi-
fies the risk, and appropriate collateral is required.
n Next comes the appropriate interest rate, and what should that be? The rate is a result of
how much the loan costs the bank, the quality of the collateral, and the creditworthiness of
the borrower (note that many banks will ask for a personal guarantee). If you have a deposit
relationship with a bank, they will also take the availability of that cash into consideration
when the rate is set. Keeping a clean set of business records and taxes will also come in
Remember that your bank does not pay for the use of the money that you keep in your
checking account. Hopefully you will get some consideration for those funds. Show a con-
sistent or growing average daily balance and you'll see your banker perk up and listen.
As long as you own a business you should be on a continual quest for a banking relation-
ship that serves your company's financial interests and requirements. The bank that you
choose today may not be the bank that you'll use in a year. Remember that you are their
customer and when the time is right you should have several banks asking for your busi-
ness. Don't ever forget that!
In addition to having an ally at your bank, you'll also want to partner with an insurance
agent. As a small-business owner, you may be able to use your personal relationship with