The Most Bank for Your Buck

Organize that information and present it professionally. “If someone comes in with some numbers scribbled on a piece of paper, that doesn’t make the same impression as if they’ve had an accountant work it up, or even just typed it neatly,” says Dusten Johnson, vice president of commercial lending at Minneapolis-based Northeast Bank.

Present the information regularly. “If you want to have a good relationship with us, show a commitment to showing us timely financial information,” says Leif Syverson, executive vice president and founder of Minnetonka-based Signature Bank. A loan agreement will tell you how often your bank wants records.

Ask your banker how often he or she would like to discuss your business. Send new information when you have it. “You can’t do it too often,” Johnson says. “The more information you provide to your banker, the better.” Doing so makes you look organized and professional, and increases your chance of getting a loan quickly if you need credit.

Good With the Bad     

Bankers love to know that your business is going well, but it’s even more important to communicate with them when things are going poorly. Of course, that’s exactly the time when most business owners want to keep things to themselves or put off discussions about money. Overcome that instinct and talk to your banker as soon as you know that trouble is in the offing. “It’s always better to have told us of a potential adverse event and then have it not happen, than to not have said anything and have it happen,” Syverson says. “One way we’re relieved, the other way we’re concerned.”

When you divulge the situation, resist the temptation to add an unwarranted positive spin. “Be honest,” Johnson says. “Sometimes business owners try to paint a really rosy picture, and then the banker looks at the financials and that’s not the picture they see.” Your lender should be able to trust your word. Don’t tell them an account will pay in a month if it’s really likely to pay in six months.

“If customers don’t share the significant events with us, it’s awfully hard for us to maintain a high level of confidence in them and their abilities,” Stenson agrees.

An early revelation also lets the banker find ways to help you. “We may well have a product or service that can help with a challenge,” Stenson says. That might include making a loan interest only, or restructuring it in another way to help you get through a cash crunch.

After all, if you fail, the bank loses a valuable customer—but only if you’ve put in the time and effort to become that valuable customer.