If you choose your lender carefully potentially you have a strategic partner that can help you grow your business. In order to get the most out of your relationship you need to invest time in cultivating it and building trust and confidence between you and your lender. The following key steps will help that process.
Accurate and timely information
Almost inevitably there will be a requirement that you provide specific financial information (management accounts, audited accounts, budgets and forecasts etc ) on set dates to your lender .It is vital that you produce the information required , in the format required and within the specified timescales. Failure to do so not only undermines your relationship but can also be a breach of the terms of your finance documents, which can have adverse consequences.
Accurate and timely provision of information is the cornerstone of your relationship and will stand you in good stead if you want to increase or amend the terms of your facilities.
In any business unexpected events and setbacks do occur. If you do have bad or disappointing news be proactive in sharing it with your banker. Ideally before you do so identify the issue, why it has arisen, the impact it will have and your plans to remedy the issue or mitigate its impact and prevent it happening in the future. By being forthcoming about an issue you give your banker an opportunity to be part of the solution and help resolve the matter. All of this builds trust in your ability to deal with the vagaries of managing a business successfully.
Clear, regular, open lines of communication are a necessary component in cultivating a strong relationship with your banker. Using this platform your banker can provide you with expert financial advice, input into your business plan and help you meet your objectives.
Visiting your operations is a great way to help your banker get a better feel for what you do, experience the environment you are operating in and to meet the wider team. It is an important part of building your relationship that your banker gets to know the wider leadership team and understand their respective roles and responsibilities in your organisation.
Equally it is incumbent on you to make an effort to develop relationships at a number of levels within the bank, not just your relationship manager. You may need to speak to someone urgently or your relationship manager may move on , so knowing their line manager and associates ensures better continuity of service for you .
Do not be reluctant to give feedback on them and the services they are providing .If your banker is not meeting your expectations let them know so that they have an opportunity to rectify matters.
Valuable introductions and information
Your banker (particularly if they have deep sector knowledge of your business) can be a valuable resource by introducing you to useful business contacts and potential new markets. Be proactive in seeking such introductions.
Banks often host events and seminars which can provide helpful information and support for your company. Such events are often useful networking opportunities, particularly if you have done your homework beforehand and discover who else will be in attendance.
Many banks offer online tools and resources that you may find beneficial in running your business. These include market analysis, sector insight, horizon scanning and advice on everything from cyber security to use of social media.
It makes sense to have a formal annual review meeting which should cover:
- Looking at the products and services you use ; perhaps you are paying fees for ones you do not use or something better or more efficient has been introduced that is more appropriate for your needs
- Identification of other tools and services that will enhance your performance and promote more efficient practices
- Clarifying your financial goals and , if they have changed , making necessary adjustments
- Reviewing your business and financial strategy
- Agreeing what you will both action following the meeting.
The right banking relationship can prove to be rewarding and will make your life easier .Once you have found the right banker then do take the initiative to foster your relationship to get the most out of it.
Author: Helen CornerThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.