2 Ways Your Lender Should Compete For Your Business
Often business owners think banks and lenders only compete on the price of checking account services and interest rates, but as a business owner you should expect more from your lender.
Here are two ways your lender should help out your business:
1) Your lender should work to educate you.
Has your lender ever sent you explanations of financial products? Not all banks have understandable resources for laymen when it comes to the products they offer—many tend to think people really enjoy reading fine print. Even if the bank does not provide their individual lenders with educational material, that doesn’t excuse your lender from part of their job: making sure you know how the financial products your business uses are the best fit.
Since lenders deal with business owners of varying degrees of financial literacy everyday, they should know of some resources to get you up to speed on financial products they offer. These could be online resources, like the Bankmybiz.com Funding Option Pages which explain financial products or concepts, or well-crafted print materials. Additionally, they might know some other resources in your area—resources like seminars at the SBA or your local chamber of commerce.
Think about if you fully understand why your business has the checking account, loan type, and other financial services that it does. If you are not sure why you have them, or why you do not have something else, you should probably reach out to your lender. Your lender may have a misconception about how much you understand--realize though that most people want to help you if asked.
2) Your lender should connect you to potential customers or suppliers.
Part of the job of being a business banker is being well connected within the community—this is very important for them finding new business. A byproduct of this is that lenders serve as important knowledge hubs for current dealings in business, especially at the local level. Further, your lender wants you to succeed—especially if you have a Line of Credit, Term Loan, or another of their financial products. Whether you contribute to their top line, or their bottom line, depends on if your business succeeds or goes under.
Your lender should be referring others to you as potential customers. They know a lot of people: a typical branch manager is going to have 30 or so business accounts, and a relationship manager for a bank may have up to 400 accounts, plus all of the business owners they know but don’t have a banking relationship with currently. Chances are they know someone who is interested in your products or services that they can refer. On the flip side, when warranted, your lender should be referring you to other businesses that could help you cut costs. If one or both of these aren’t happening, you should consider whether you are happy with your banking relationship.
Think about how you are connected to your community. Do you interact narrowly with the same people in the same industries over and over again? Could you benefit by finding a lender that operates in different social circles? Have you seen any tangible positive outcomes from references from your lender?
So what should a business owner do if they feel like their lender is not offering their business enough? What if after a few attempts your lender isn’t responsive to your educational needs and does not seem to be looking to help your business tap into their network?
Find a lender you get along with at least on a warm professional level. Finding topics to talk about other than strictly business shouldn’t be a stretch—and no the weather doesn’t count. Obviously just because you get along with a lender doesn’t mean you should change accounts if it means accepting much worse financial products. At the end of the day the relationship is primarily business.
This step serves to get your lender excited when talking to and about you. A lender that can personally endorse you will help out immensely with word-of-mouth referrals. Also, if you have a warm relationship with your lender, you won’t feel imposing when asking for help understanding a financial product or concept.
Banks compete on more than just the price, they also compete on service—make sure you’re taking full advantage of everything your lender can offer.