Why do so many good commercial lending deals fail? Not because of lousy business plans, poor personal credit or over-inflated numbers. In many cases business owners simply go to the wrong bank. Every bank has a different appetite for certain types of lending. Businesses should look at their particular circumstances and find a bank that best fits their needs. The decision of where to find business capital involves more than just comparing interest rates. Here are some questions to ask when evaluating lending sources:
1. Can you meet regularly with your banker? Choosing the right banker is similar to choosing a good doctor. You want someone who is competent, personable and a good listener. The right banker can become an integral part of your management team. Meeting face-to-face and discussing your future plans is an important part of building a successful banking relationship.
2. Are loan decisions fair and balanced? You’ll want a lender who can provide a balanced credit decision that takes into account your total picture, including all of your business assets and potential.
3. Does the bank understand small business?
4. Does the bank understand your industry? When bankers don’t understand how an industry operates, they don’t understand how they’ll be repaid. And when bankers don’t understand how they’ll be repaid, they decline loan requests.
5. Is the bank small enough?
6. Is the bank large enough to meet your needs?
7. Does the bank have the ability to advise?
--Ron Ameln, SBM
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