We have seen many situations in which borrowers have let us know a little too much information. Whether it is cheating on taxes or forcing another lender to give them a discount with bullying techniques and tactics. These people do not become our clients, we cannot trust them. For example, there is a difference between tax avoidance and tax evasion – it’s about 5 years in prison.
This industry is flooded with options. Which makes it easy for a borrower to find the best rate – you may think. Now, many big banks are trying to cut costs by hiring less skilled lenders and using a cookie cutter loan approval process. If you fit in this box, you are approved, if not, you are declined. It’s all about the numbers. Applicants rarely get a chance to discuss the loan with the person who decides whether a loan is approved or denies. This lack of communications leads to a significant number of worthy loan requests rejected.
This is where banking relationships matter
Building a relationship with your bank establishes trust on both ends. If your company meets its financial obligations the bank will, in turn, meet your company’s financial needs. This can mean more favorable interest rates and loan terms. Strong banking relationships are usually offered better interest rates, loan structures and terms than a business without a relationship.
A longstanding relationship with your bank can also help ease the loan application process or special requests. This is why companies stay with the same bank. Although customers may be able to find a lower rate elsewhere, when a disaster like Covid hits, a bank is more likely to lend to customers with an established relationship rather than a company that hops from one good, low loan rate to another.
Throughout the pandemic many experienced businesses suffered frozen lines of credit, or the inability to receive PPP loans. Some businesses even had to scramble for cash and borrow at higher rates until access was regained to their line of credit.
Treat your bank the way you want to be treated
Make your relationship more than the terms outlined in your contract, it is worth it in the good and not so good times. Make payments on time, answer their calls, and submit monthly reports when due. Your bank will appreciate not having to track you down. In short, be a model customer.
Finding your small business in a financial pickle? Give American Finasco a call. We provide our clients effective solutions for business debt relief. Contact us today to get your business on the right track! Visit Contact Us and complete our Online Form for a free consultation or call (800) 299-2909. We look forward to speaking with you.