Smart Business Magazine, December 2019

70 Smart Business Cleveland December 2019 INSIGHTS BANKING FINANCE Evaluating your banker How to look for and identify the signs that its time for a new banker There are signs that a company should evaluate its banking relationship in the hopes of finding a better situation Among them are businesses that are experiencing a lack of communication with their banking officer lack of feedback and decision making ability and the frequent transition of banking officers Sometimes a company might have had a good relationship with its banker one that enables the company to get things done then the banker leaves for another opportunity says Kurt Kappa chief lending officer at First Federal Lakewood If the company then finds itself struggling to work with the banks decision makers they may want to consider asking to work with another banker or switching banks entirely Companies benefit from a partner that is proactive rather than reactive Its not ideal if the only time a company hears from its banker is when the company reaches out with an issue Theyre not asking to meet with the company to better understand the state of the business talk through ideas and generally helping to inform the companys strategic direction Instead theyre waiting for a phone call or worse too busy to recognize they havent touched base with the company in awhile If you call your banker to address a particular issue and dont get a call back for a couple days there may not be a strong relationship there he says Smart Business spoke with Kappa about how companies can evaluate their banking relationship and the signs its time to move on What questions should a company ask when evaluating its banking relationship The first aspect of the relationship to consider is whether the company likes and trusts the person theyre dealing with Does the company believe the banker has the best interests of the company in mind with each decision thats made Does the banker fully understand the business its competition and the current industry landscape And does the banker advocate for the business at the bank Its important for a business to have the right banking partners on their side especially when their expertise and advocacy are needed to help the company get through difficult times Once a company has evaluated its banking relationship what are the next steps One of the initial considerations should be to determine if the bank can still complement the companys strategy Is the business working with a banker who can contribute to the companys strategic plans someone who has the right experience and knowledge This isnt to say that a company should switch banks if the relationship isnt living up to expectations The issues could center on the person with whom the company is dealing and one person doesnt represent everyone in the bank Thats why a good first step is to look within the bank to see if theres someone else available who better fits the bill However theres also a chance that the company might have outgrown its current banking relationship The bank just might not be able to offer the rates and amortization structure it needs making relationships at that moment a secondary consideration If thats the case then its time to move on How should a company use what it learned to find a better relationship Once a company has done its evaluation and identified the problems a good next step is to start asking friends and professional advisers such as CPAs and attorneys who they recommend Its likely they know who in the community does what well Some banks are large enough and provide ample services others can provide the hands on relationship a company might be looking for Which the company ultimately chooses depends on whats important to the business owner as well as what the company needs at that stage in its life cycle Whats needed at one point in time might not be whats needed later And while some banks can grow with a company others cant Thats why companies should regularly evaluate their banking relationship KURT KAPPA Chief Lending Officer First Federal Lakewood 216 529 2998 kkappa@ ffl net Insights Banking Finance is brought to you by First Federal Lakewood WEBSITE Explore the banking services that could help your business grow Visit www ffl net Business INTERVIEWED BY ADAM BURROUGHS