… From Biz2Biz NWA, May, “Health in the Workplace”
By Dianne Bufford, Liberty Bank of Arkansas, Springdale
Banking relationships are personal, and finding the right loan officer is important to the financial success of your business. One key factor is to choose a bank that has experience lending to businesses in your industry. When bankers are familiar with your industry, they are in a better position to provide insightful advice or suggest products tailored to your needs.
A conscientious banker will ask many questions about your business during the discovery process of your loan application. Be prepared. Here are five areas of interest to a loan officer:
1. Will you have the money or resources to repay the loan? If you get into financial trouble, will you work with the bank to get it repaid? The banker will want to learn about your character.
2. How much do you really need to borrow? Is your loan request just one in a series? For example, do you plan on buying out a competitor or expanding? The bank needs to be comfortable lending your business all the funds it needs to thrive.
3. Why do you need to borrow money? Your loan request to support a growing business may be looked upon more favorably than a loan used to support unprofitable operations, or to replace funds taken out of the business to support your lifestyle.
4. How will you repay the bank and from what source? It is critical for the banker to understand how money will be repaid, as this dictates the type of repayment structure your business can afford.
5. How accurate is the information on which the loan decision is made? Did an independent third party prepare the information? Does the bank know the accounting firm providing information? Do they perform quality audits and reviews?
These are but a few questions a good banker asks. Often, the advice the banker gives you is far more important than the product or services they sell. Look for a banker who is interested in your business and wants to develop a long-term relationship.
Dianne Bufford is the Marketing Director for the NW Arkansas region for Liberty Bank of Arkansas. Email questions and comments to DBufford@mylibertybank.com
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