A bank is not just a place where you borrow money. They can actually be your business partner. The right bank will be able to help you with Treasury Management so that you make the best use of your cash. They can help protect you against fraud with Positive Pay. They can speed and control your payment of bills by the use of Purchase Cards, or ACH payments. They also can provide you with needed cash when you have a special business opportunity, or a cash flow shortage.
But many business owners don’t understand that a bank can also be viewed as just another supplier for your company. Some suppliers provide you with raw materials, finished components, packaging materials, or freight services. A bank provides you with money. Yes, it is a needed commodity, but it is just that – a commodity. There are a lot of banks out there, and just because you have used your current banker for a while, and feel that you have a “special relationship,” remember that just as any supplier is right for your company at a particular point in time, a bank is right for you at a particular point in time as well. Changing banks for the benefit of your business’ growth isn’t a bad thing, it can actually be beneficial.
Just as your company’s need for banking services changes as the market or the business climate changes, every bank’s position in the marketplace changes as well. Their pricing strategy may become more aggressive. They may be more flexible in their lending practices. They may be more lenient in their policies for covenants, reporting requirements or advance rates. That’s why it’s important to review your relationship with your lender on a regular basis. The bank that was perfect for you over the past 5 years may not be perfect for you over the next 5.
But changing banks is a complex process. The reporting required, advance rates, covenants, restrictions on distributions, bonuses or the purchase of capital equipment can change from bank to bank and might even change from year to year.
The skilled executives at CFO Simplified can help guide you through that process, and assure that you get a lending package that is best suited to your business’ needs. We are ready to help you analyze the options so you make the right decision, based on your ultimate desires and goals.