Community Banks : A viable Financial Resource for Small Business Owners Tom Coletta
For many small-business owners , it can be a daunting task to manage the financial aspects of their companies . For that reason , it ’ s critical to have experienced advisors , including a trusted banker , who can serve as resources as you plan for the future . Whether you ’ re seeking to purchase new equipment , build a new office or hire more staff , business moves of this magnitude may require a commercial loan . The first question is often , “ Where should I look ?”
While there are numerous options from which to choose , not all deliver the same benefits . Make a short list of potential lenders by shopping around to compare offers . As you go through the process , keep in mind that bigger isn ’ t always better – or safer . Big banks definitely offer name recognition , and thus on the surface might seem like the best option . However , smaller community banks provide their own set of benefits . For example , your connection with a community bank is typically built around a keen understanding of your company ’ s needs and a focus on long-term relationships . Community bankers strive to understand the nuances of their client ’ s business to create strategies that prioritize the owner ’ s best interests . Community banks are also often nimbler and able to craft more flexible , customized solutions .
Another advantage of working with a community bank is that lending decisions are usually made locally … which can translate into a more efficient experience with fewer layers of organizational bureaucracy . Key decision-makers may well be people you know . In addition , because community bankers rely heavily on personal relationships , they can be a good fit for smallbusiness owners who also want to expand their presence locally .
Of course , whichever financial institution you choose , make sure it is healthy and in good standing with regulators . The Federal Deposit Insurance Corporation is an ideal resource for checking a bank ’ s financial stability .
Once you ’ ve done the requisite due diligence , schedule an in-person meeting with the prospective lender . Be prepared to come to the table with a firm command of your business goals , current financial standing and plans for the future . Here are some suggestions to ensure that the conversation is productive :
Business Plan : Prior to meeting with a banker or lender , it is important to have a business plan in place – preferably one that has been reviewed by your certified public accountant . The plan should include articulated short- and long-term financial goals . Maybe you need a loan immediately to purchase new equipment , and you ’ d also like to open a second office within five years . With that in mind , look for a banker who thinks beyond temporary solutions , can anticipate the growth of your business , and will craft a lending solution to get you there .
Cash-Flow Cycle : Make sure you have a solid grasp of your accounts receivable and that your banker understands your payment mix . For example , many large corporations , medical insurance companies and government entities
32 | WINTER GARDEN MAGAZINE | JUNE 2018