Whether you're starting out or expanding your operations, banks play a critical role in providing financial services, credit and advice that can help your business thrive. However, like any partnership, fostering a healthy relationship with your bank requires effort. This article explores the benefits and offers practical tips for cultivating that relationship. 

Why a positive bank relationship matters

Banks can provide crucial support in several key areas...

• Access to credit and financing: Banks are a primary source of funding for small businesses. When you need capital to grow, cover seasonal cash flow gaps, or invest in new opportunities, having a bank that knows and trusts your business can make the difference in securing that funding.
• Financial advice: Beyond lending, bankers have insights into industry trends, risk management and financial planning, which can help guide your strategic decisions. A positive relationship ensures that they understand your business model and challenges and in turn improve the relevance and quality of the financial advice you receive.
• Best banking products and services: Banks can offer tailored solutions for payment processing and cash management. They also offer a range of digital services tailored to small businesses, including giving your customers more ways to pay.
• Flexibility and support during hard times: Business can be unpredictable. Natural disasters, economic downturns or unexpected costs can throw a wrench into even the most well-planned operations. Banks are more likely to extend grace periods, adjust loan terms or offer alternative solutions to businesses owners with whom they have established a good rapport and a long-term understanding of their business.

Steps to build a strong relationship with your bank

Given the importance of a solid relationship with your bank, how can you, as a small business owner, go about fostering this partnership? Here are some key steps:

Communicate regularly and proactively

Open, honest, and frequent communication is the foundation of any successful relationship, including the one with your bank. It's good practice to check in with your banker at least once or twice a year to update them on the health of your business, discuss future plans and talk through any challenges you’re facing. You should aim to establish relationships not only with your account manager, but also with other key contacts at the bank.

When things are going well, let them know. Conversely, if your business is experiencing challenges, be upfront about the situation. Banks prefer to know about issues before they turn into major problems because they can work with you to develop a strategy to weather the storm.

Provide transparent and accurate financial information

Banks make decisions based on financial data, so any information you provide must be accurate and transparent. Ensure that your financial records are well-organised and that your bank has access to your current financial statements, including profit and loss statements, balance sheets and cash flow projections. This helps build trust and demonstrates your professionalism.

Understand your financial needs and goals

Before approaching your bank for financing or other services, be clear on what you need and why. Do you need a short-term working capital loan, or are you seeking a long-term solution to fund business expansion? Are you hoping to consolidate debt, or do you want to open a new business account for better cash management? When you can articulate your business’s financial goals, banks are better positioned to offer appropriate solutions. It also helps them understand the direction of your business and anticipate your future needs.

Choose the right bank for your business

Different banks offer different strengths, so it’s important to align yourself with a bank that understands your business and its unique needs. Look for a bank with a strong presence in your area and one that has a reputation for working well with small business owners. Take the time to evaluate different banks and determine which is best for you.

The long-term benefits of a strong bank relationship

Fostering a strong relationship with your bank isn’t just about improving your access to financing – it’s about establishing a long-term partnership that supports the growth and sustainability of your business. A bank that understands your business can help you anticipate and adapt to challenges, navigate economic trends, seize opportunities and ultimately achieve your goals.

Moreover, a positive relationship with your bank can boost your confidence as a business owner – just as it does when you have a good working relationship with your business advisor. Knowing that you have a trusted partners who are invested in your success allows you to focus on what you do best – running your business.

– Would you like specific help from our trusted accountants and business advisors? Call today to set up a meeting!