How to choose (and court) a banker
This is the fifth in a continuing series, co-authored
by Ron Sturgeon and Greg Morse, founder and president of Worthington
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
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
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, firstname.lastname@example.org or
817-834-3625 ext 6#.