BUILDING A STRONG TEAM
Why it ’ s important to have a good banker on you business advisory team
You want the best for your business , so it only makes sense to surround yourself with those who also want to see your business succeed . As a business owner it ’ s important to get support from business advisors who have expertise in specific areas to help you make your business successful . Yes , your CPA plays a critical role for you , but it ’ s also important to cultivate relationships with a business attorney and business banker .
Each member of your business advisory team plays an essential role in your success . Your CPA can make sure that you have systems to capture and report timely , reliable financial information and , if needed , can provide assurance regarding your financial statements . A good attorney can help safeguard your business assets and provide assistance in drafting agreements , contracts and other legal proceedings . A business banker can provide lines of credit or loans to help meet the cash flow needs of your business .
The Importance of Your Banking Relationship
Strong banking relationships are built over time through regular two-way communication . You should be well-versed in upcoming cash needs , such as expanding inventory or the increased needs of personnel cost , and communicate these to your banker . As you keep them informed of business decisions and trends , this helps to build a lender ’ s confidence in your ability to manage your business . A well-informed and communicative business owner may be given extra consideration when business financial issues arise .
Four Key Indicators That Help Bankers Evaluate Your Ability To Repay
Banking is a low-risk industry and they have one major concern when lending money : your repayment . They evaluate your ability to repay based on these four areas :
• Credit – Another key indicator is your credit history and track record of your past ability and willingness to fulfill prior financial obligations . If you have a good credit score , you ’ ll be given more favorable treatment in both the receipt of a loan and the amount of interest charged .
• Character – Your relationship with your banker allows them to consider your integrity . It ’ s critical to let your actions meet or exceed the expectations your words establish on a regular basis .
A good business banker is your advocate – they ’ re in your corner . Like CPAs , business bankers are exposed to multiple businesses and industries and they can be a great sounding board for ideas and help you strategize on ways to reach your financial objectives .
Business Relationship Help
Need to round out your business advisory team ? Give me a call ! We can provide accounting services and business consulting services to your business , but we can also connect you to other business professionals who can help strengthen your business advisory team .
• Cash Flow – This is a key indicator of your ability to repay the original loan . If you have strong cash flow , the chances are high that you are able to repay your loan .
• Collateral – When a loan is originated , it ’ s never the goal for the loan to be foreclosed on and collateral seized , but it is required as security .
by : Ben Froese
CPA , Senior Manager 545 N . Market St . Wooster , OH 44691 ( 330 ) 264-0791 ben . froese @ reacpa . com