by Ron Sturgeon

Most people won’t start looking for a banker until they need money, which is a lot like looking for a spouse when you decide you’re ready to start a family. Finding the banker who is right for you takes a lot more time and planning than most people realize, and it’s something that should be done long before you think you’re going to need one.

Banking isn’t an event that happens spontaneously; rather, it’s a process that needs to be approached carefully and strategically. The first, and probably most important, step is to create a relationship that opens the door for the banking process. Greg advises doing all of your banking in person so that you can get to know more of the people at the bank. Ron adds that this is impractical for many business owners, but you do have to know your banker and the staff. Make sure that when feasible, you don’t use the drive through for deposits, go in. Stop in and say hello at least once monthly, perhaps while cashing a check.

But before you do that, you’ll need to spend some time researching the banks that are accessible to you and finding out which ones best meet your needs.

Looking for the right banker

Greg: Banks, like doctors, specialize in different things. If your hand hurts, you’re not going to go to a heart doctor. If you have a brain tumor, you see a neurosurgeon. If you’re a business person, you need to find a business bank, not a consumer bank. For example, you don’t want to go to a credit union if you’re looking for a business loan, because credit unions specialize in consumers.

You also need to look at whether you need a big national chain or a local bank. If you have 100 locations, maybe it’s important for you to have a chain that can serve you in a lot of locations. But if you have a single location, maybe you would be better off with a local bank. You need a bank where you can go in, state your case and have the person across the table be able to make a decision.

Ron: Personally, I think that all banks are greedy. Any bank that you call up and say, “I want to finance a car” or “I want to finance some equipment or get a loan for my company” – they’ll all say yes. I don’t think everyone knows whether a bank is a consumer bank or a business bank, so how do people find out?

Greg: You should be able to find that on the bank’s website. Most banks’ websites will tell you what the bank does.

Ron: Once you’ve found the bank you want to do business with, how do you choose who to talk to? Anyone who walks in or calls the bank without knowing who they are going to meet is going to be paired with a “relationship banker.” All that means is that he or she is going to be dealing with someone at a very low level, has a very low loan-lending limit and makes lending decisions based on very black-and-white numbers.

Greg: Walking in the door is exactly the wrong thing to do. A better way is to find out where someone else banks and get them to refer you.

Ron: Instead of just getting a referral, I would even ask that friend to call the bank as a sounding board and open the door a little bit. You know, maybe have this person call up and say, “I have a friend who’s a car dealer, and he’s looking for a loan, but I wasn’t sure if you guys did loans for car dealers.”

Greg: That’s a good idea. I’m also big on choosing someone who has common interests with you. It might be hunting or fishing or golf; whatever it might be, it helps to have some common ground.

Next time, we will talk more about what kind of experience the right banker should have.

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Ron Sturgeon is past owner of AAA Small Car World. In 1999, he sold his six Texas locations, with 140 employees, to Greenleaf. In 2001, he founded North Texas Insurance Auction, which he sold to Copart in 2002. In 2002, his book “Salvaging Millions” was published to help small business owners achieve significant success, and was recently reprinted. In June 2003, he joined the new ownership and management team of GreenLeaf. He also manages his real estate holdings and investments. You can learn more about him at WWW.autosalvageconsultant.com He can be reached at 5940 Eden, Haltom City, TX 76117, rons@rdsinvestments.com or 817-834-3625 ext 6#.