What a small business should look for in a banking partner

Q: As a small/growing business owner, what should I look for in a banking partner?

A: It is important to have a relationship with a banker that is:

1) interested in your size and type of business and has potential financial products that can fill your needs, and

2) with whom you feel personally comfortable working with.

Bear in mind, however, that should your business grow to a very large size, you may have to switch eventually to a different bank because they cannot meet your needs anymore.

But hopefully you can maintain your initial relationship for at least five years or more until you hit that stage.

A look at the potential bank's website is in order, and if the bank is local to you, then a personal visit to a representative of the bank is appropriate.

If they do business lending, do they prefer established firms, or loans for assets that can be collateral?

Are they willing to lend to early stage firms that do not have immediate cash flow or assets?

The smaller the bank, the more likely you will have a close relationship with it, but you run the risk that they may not have the services that you might need.

For the most part, banks of all sizes can get access to the services you may need by partnering with others, but the preferred situation is to be with someone who specializes in what you need.

Do you feel comfortable with the banker? A nice thing about a local or community bank is that their reputation for honesty is on the line every time they interact with a potential client.

Another aspect of honesty is if the banker can tell you the limits of what they can do for you.

That way you can judge when you need to go onto the next stage of bank without it being a surprise.