TCB in the Community

How to Choose a Banker for Your Houston Small Business

posted on August 20, 2020 in Financial

7 Steps to Finding a Business Lender that’s More Advisor than Salesperson

 

Finance guru and talk radio personality Dave Ramsey encourages his listeners to look for financial advisors with the “heart of a teacher.” Of course, that’s easier said than done when it comes to business banking. After all, salespeople outnumber true advise-first bankers these days.

Here are a few screening questions you can ask yourself when deciding on a bank lender:

Do They Educate You?

As a business owner, you should feel comfortable asking your bank lender questions. In short, if you don’t understand more about your financing options after leaving a meeting, you’re not in the right relationship.

TIP: Ask your lender to walk you through your financial statement.

Do They Ask Questions?

The best lenders consult with business owners on every project. They’ll ask you about your short- and long-term goals, current financial standing, strengths, weaknesses, opportunities, and restraints. That way, they can find the best loan package to get you from point A to point B.

Can You be Honest with Them?

It may feel uncomfortable at first, but the more open you are about your finances, and any concerns you have for the project, the quicker the loan process. When you feel confident your banker has your best interests in mind, this part gets easier.

What Are Their Motivations?

We’ve all been stuck on the phone with an aggressive salesperson trying to meet a quota. If your lender is pushing you in a direction you don’t want to go, that’s a red flag. If they’re not able to explain why their recommended direction fits your business specifically, that’s another flag. Salespeople recommend one-size-fits-all solutions. Advisors listen and tailor-fit to your needs. If you’re feeling trapped or restricted by your lender or their bank’s loan products, keep looking. Life’s too short for financial inflexibility.

Do They Care About Your Business?

A good lender will take the time to get to know your business. They will seek to understand your day-to-day operations, ask to see your facilities. They will be just as interested in your business motivations as you are in theirs. A good lender wants to know you’re serious about your business and have what it takes to grow.

Are They In It For The Long Haul?

The loan process should not feel like a transaction. Rather, it should feel like an important strategic step in a larger plan. Good banks and lenders will offer more than loans. They’ll recommend business deposit accounts that match up with your business type, and Treasury Management Services designed to improve your clunky cash flow processes.

A relationship-focused lender, or “relationship manager,” doesn’t just look at the timeline of your loan. Instead, they’ll consider what your business could look like 10, 20, 30 years out. Thus, they’ll add value beyond what you sign for, helping you tighten all aspects of your business.

Tip: Ask your banker what Treasury Management Services and Business Accounts are available. Follow up by asking which best suit your business.

How Fast Do They Move?

The best test for a potential lender? Check their response time.

  • How easy is it to get ahold of them on the phone?
  • How quickly do they respond to emails?
  • How helpful are each of those communications in helping you move forward?

TIP: Be sure to vet variables that may be out of your lender’s control. For instance, ask about the loan decision-making process. Who approves the loans? Where and when does this happen? Local decision making, a flexible management team, and weekly loan committee meetings are what you’re looking for. Otherwise, it could be months before you’re even approved, let alone paid.

Share This!

Mortgage Payment Calculator*

Balance time, interest, and monthly payments to see what financing works best for your goals. Web browser must support JavaScript. *This calculator tool is for estimating purposes only and may not calculate your exact payments.

Years:
Interest:
Loan Amount:
Monthly Principal Interest

Loan Payment Calculator*

Break down your loan to determine which payment options best fit your needs. Web browser must support JavaScript. *This calculator tool is for estimating purposes only and may not calculate your exact payments.

Principal:
Number of Payments:
Interest Rate:
Your Monthly Payment:

Savings Estimator*

Enter how much you can afford to save monthly to see how much that investment could benefit you later. Web browser must support JavaScript. *This calculator tool is for estimating purposes only and may not calculate your exact payments.

Total invested each month: (Ignore comma)
Number of months/years to acquire sum:
Interest rate on savings (%):
 
 

Debt Payoff Calculator*

Make goals to pay your debt off by a specific date. Use the calculator to plan out payments and set a timeline to become debt free. Web browser must support JavaScript. *This calculator tool is for estimating purposes only and may not calculate your exact payments.

Enter your credit card balance:
Enter the credit card's interest rate:
Enter payment amount per month:
or
Enter desired months until debt free: