Communication With Your Banker
One of the positive, almost hidden, aspects of credit is that your bank has a stake in the success of your business and wants you to succeed. Therefore, your banker is your ally and should know almost as much as you do about your business in order to offer you valuable ideas, insights and solutions to problems, as well as help create possible business development opportunities for you.
Providing your banker with your business' financial information frequently, as well as having regular, open communication with him or her is very important to building trust and credibility. Particularly if your business is encountering problems. No one likes surprises. So don't wait until your company has encountered a tough issue (e.g. difficulty making payroll, loss of sales, bankruptcy of a key client) to let your banker know about problems. Especially if you need additional financing. Notifying the bank early builds trust and gives your banker the flexibility to possibly make concessions that might not be available down the road.
To negotiate with your bank from a position of strength and enhance your credibility, it is essential that you identify the problem you are having and propose a reasonable solution. You can also ask your banker for ideas on how to resolve an issue you are grappling with. Many bankers have the in-depth knowledge and experience to provide helpful solutions. Taking this approach will impress your banker and help build the trust necessary for your bank to consider modifying the terms of your banking arrangement to give your business some breathing room when needed.