Business bankers are key to success

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A business banking relationship can sound scary, especially to business people just starting out or looking at making a major decision with big financial implications.

But your business banker can be a tremendous resource and one of your best sources of advice, connections, business strategies and, yes, cash, to fuel the business.

For anyone in business or considering starting a business, it's important to develop a business banking relationship. Doing that sooner rather than later is preferable, ideally before you need the immediate help of a business banker.

Many business people have a mental image of how the relationship works, with the business person nervously sitting before the banker waiting — perhaps even praying — for a positive answer and outcome. But that's hardly the case. Your relationship with your business banker should be a two-way street. Both of you have needs but also responsibilities to each other.

If you are in a banking relationship that doesn't feel like this, or if you're headed toward developing one that already is giving you concerns, my strong advice is to find a new bank, a new banker and a new relationship.

Here is what you should expect your business banker to do for you:

• To take the time to truly listen to you, including talking about the history of your business, why you started it, how it is operating today and your plans for it in the short term as well as further down the road.

• To invest himself or herself in understanding your needs and business goals as well as how the bank can help with specific products and services.

• To go to bat for you and your business to access needed products and services. This includes a willingness to communicate on your behalf with others at the bank so they can help, if needed, as well as patience while you gather information, documentation and other requirements to access services.

Here is what your business banker should expect from you:

• To take time to listen to your banker and understand what the bank can and cannot do, as well as the processes for accessing products and services.

• To work with your banker through the steps of review and approval, being patient as well as scrupulously honest about your finances, your business plans and your operations. This includes asking for clarification if you are unclear about any part of the process.

• To provide clear and complete documentation of your business finances when the time comes.

• Typical documents required for a commercial loan include a current financial statement for the business and sometimes for the owner or owners personally; two years of tax returns for the business and possibly owners; and a clear statement about how the loan proceeds will be used as well as how they are expected to impact the business.

Once both sides have a solid understanding of each other and have developed a relationship based on trust, the business owner and the business banker can work together to grow the business. Far from a nerve-inducting or stressful situation, a healthy business banking relationship can be one of the most powerful tools for achieving business goals. It can be quite pleasant, can last for years and can be a major stress-reliever — not stress-inducer — for the business owner.

Bruce Illsley is a commercial banker at Park State Bank in Duluth. You can contact him at illsleyba@parkstatebank.com or (218) 722-8001.