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willing and able to work with the venture in good times and bad. Some banks have rep-
utations for foreclosing early or for calling in loans when the bank’s balance sheet needs
cleaning up.
The firm should look for a bank with experience lending in its industry. Banks have
different specialties, in a sense, and their loan officers and lending committees have par-
ticular knowledge resources. If the lenders have experience in the borrowers’ area, they
are more likely to understand the details of the loan application. The size of the bank is
also a factor. A bank that is too small for the firm will not be able to finance follow-up
loans. Banks have regulations about how much they can loan to a single client. A bank
that is too big may consider the firm’s account trivial compared to the mega-deals it han-
dles. If the business is international and will involve importing, exporting, or carrying
on a banking relationship outside the home country, it needs a bank that is experienced
in these matters and has correspondent relationships in the host countries.
Personal chemistry is also important in choosing a banker. Entrepreneurs are advised
to do business with people they like and people who like them. The bank they choose
should have on staff someone who will be their champion, who will present the firm and
its prospects in a positive light within the bank itself even when the entrepreneurs are
not personally there.
There are additional criteria to consider when looking for a banker:^22- Does it see the firm through adversity? A good bank will help during a difficult
spell. It will be patient in waiting for repayments and may even extend more credit
to meet external obligations like payroll. - Does it save the firm time? When an entrepreneur has an opportunity that requires
fast action, a solid bank can make decisions quickly and extend credit. - Does it treat the entrepreneur as an individual? When the Reynolds firm, a
Lynnwood, Washington, retail-store fixture manufacturer, met with the loan officer
at a local bank, he was practically overwhelmed with detailed questions about his
business. The company got the loan and the bank got the rest of the company’s
business. “I decided that if they were smart enough to ask these intricate questions,
they must be worth banking with,” explains Paul A. Abodeely, Reynolds CEO. - Does it teach and advise? Frequently banks have long experience in certain types of
businesses. A good bank will share this expertise and help train and counsel its
clients. Can you call for advice when you need it? - Does it do something special? By 10 a.m. every morning, there’s a report from his
local bank sitting on the desk of Jack Greenman, financial officer of the Sterling
Healthcare Group, Inc., in Coral Gables, Florida. The report shows all the previous
day’s deposits and disbursements, including deposits from lockboxes in 19 states
that the bank has swept into its central account. The service doesn’t cost Sterling
Healthcare a dime. - Does it accept responsibility? Garden-tool maker DeJay Corp. of Palm Beach,
Florida, was upset when a bank posting error caused some of its checks to bounce.
But they were smiling when the bank not only apologized, but also called every cus-
tomer and vendor who might have received such a check and explained that it was
the bank’s mistake.