One of the interesting things about the internet is that whatever is written stays out there for a very long time…forever? This morning I ran across an Inc. Magazine Online article from 1996 suggesting that small businesses should be shopping around if their bank does not meet some criteria.
And as is often the case, the word ‘bank’ could be replaced with ‘credit union’ if you are offering member business lending.
A Borrower’s Market for Small Business
Before I share it with you, let me suggest that at least for small businesses who are in a strong credit position, it is definitely a borrower’s market…again. So here is your borrower’s checklist:
- Does my financial institution see me through adversity?
- Does it save me time?
- Does it treat me as an individual?
- Does it teach and advise?
- Does it do something special for me?
- Does it accept responsibility for me?
- Does it let me borrow against the future?
- Does it find customers for me?
Back to the Future?
I am not suggesting that we are in the same boat now as we were in 1996. But cycles are cycles. Is your bank or credit union positioned to come out on top when the borrower’s start asking these questions again? Read the entire article for specific stories that illustrate each of the points.
What are you doing to increase your competitive edge?
Okay, you probably won’t answer that here because your competitors read this blog, too. But think about it!
That is a very interesting view about bank loans.I’d like to offer an additional viewpoint because a bank doesn’t loan you money, doesn’t mean they don’t have your best interest at heart. Because if you default on a loan, the bank will most likely lose money where as if you create a successful business with the loan, the bank will make money from the interest. I don’t think that you “shop around” for banks just because one doesn’t see you as profitable, there should be more then just one reason to switch.
I agree, Ryan, that switching banks should not be done lightly. A good first step if you are turned down is to have a conversation with your banker to really understand why.
There are a lot of benefits to a long-term relationship with a bank. And if a bank can no longer take care of your needs, sometimes you have to make a move. It could be the bank does not have an appetite for that type of loan right now, or even that they are up against capitalization requirements and are not making the loan for their own reasons.
Yes, your current bank first…then move if you have to.