Feb 26, 2024 | Financial Acceleration

Zenagos Expert Finance Tip: Get to Know Your Banker

Q. Dear Zenagos,
I think I need a loan for my business. Where do I start?

Small business owners often express frustration that they cannot get a bank loan to grow their business, even when it is producing healthy revenue. However, they might be surprised to discover that the bankers are frustrated, too.

When we inquire with bankers about why small businesses have trouble getting loans, we hear that small business owners often have “messy books” because they have not had a qualified bookkeeper and/or accountant or that they do not have a clear understanding of what they would do with the money if they were to receive it.

Since securing adequate funding can make the difference between growth and failure, increasing your odds is critical. One underappreciated way of improving your changes of getting a loan is to cultivate a strong relationship with your banker.

Most banks have a person whose role is to help increase the number of business loans that the bank gives out. Often called a Business Development Officer (or “BDO”), this person serves as the liaison between entrepreneurs and the bank. If you can locate and build a relationship with this person, you can create an invaluable ally – someone who can offer guidance and advocacy throughout the loan application process.

Central to this relationship is your ability to articulate a compelling vision for your business. By demonstrating a clear understanding of how the loan funds will be used and what results you expect, you showcase your expertise as an entrepreneur and lay the foundation for your BDO to champion your cause within the bank.

While you may think it unwise to share your challenges with your banker, it is important to be transparent with your BDO in order to build trust. Sharing not only your successes, but also your setbacks and aspirations, creates a deeper understanding of your business journey. Armed with this knowledge, your BDO can tailor financial solutions to align with your specific needs and aspirations.

Moreover, nurturing a genuine connection with your BDO goes beyond transactional benefits. It fosters a collaborative partnership where both parties are invested in the success of your venture. Whether it’s navigating complex loan terms or seizing new growth opportunities, having a trusted advisor by your side can make all the difference.

In the end, leveraging bank relationships isn’t just about accessing capital; it’s about unlocking a wealth of support and expertise to propel your business forward. By embracing openness, building trust, and fostering meaningful connections, you will pave the way for sustainable growth and long-term success in the competitive small business landscape.

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