Banking And Lending Relationships

Posted on April 4, 2020 by Rick Perrin

Strong banking and lending relationships are key to a well-financed business. Well financed businesses can operate much more efficiently than cash strapped firms and can take better advantage of market opportunities when they arise. Owners, of businesses that are well financed, are able to sleep much better at night than those who struggle with cash. Since banks are the single largest source of financing (cash) for business, having strong banking relationships is paramount to having a well- financed business.

Some companies, especially startups and those with little equity may have difficulty borrowing from banks. There are times when other non-bank lenders can provide better financing options than banks. Therefore, having strong relationships with other lenders such as asset based lenders, lessors, private investors and investment bankers can be very important to business success.

Strong banking and lending relationships are based on trust and good communications between the banker (lender) and the borrower. Providing lenders with accurate and timely financial statements, good cash flow and income projections, and keeping them informed about major business decisions and activities will go a long way in developing trust and cementing a strong relationship. Bankers/lenders will provide better financing for relationship-based borrowers who keep them well informed about good as well as bad news in the business. Businesses that have strong financial management and institute good financial procedures and controls will also be looked on favorably by bankers and other lenders.

B2B CFO® advisors, on average, have worked and negotiated with lenders for over 25 years and have strong relationships with many banks and alternative financing sources. They understand which banks and other lenders will serve your company the best, based on your industry and company profile. B2B CFO’s will help you put together the accurate and timely financial statements and pro-forma cash and financial projections that will help you secure a great financing package for your business. In addition, your B2B CFO® advisor will help you determine the most appropriate mix and terms of financing to best meet your companies needs, whether it be short term lines of credit, long term debt, leases, or working with you and investment bankers to secure equity capital.

Your B2B CFO® advisor will help you make better business decisions by helping you analyze your business from a financial standpoint and by implementing a management reporting system that gives you the information you need to make better decisions. This will help you increase profitability and drive your firm’s growth, strengthening your company and its banking and lending relationships.

Working with banks and lenders can take substantial time and effort. Your B2B CFO® advisor can take care of much of the work for you, allowing you to spend your time leading and improving the business and increasing sales. Your banker/lender will also feel a sense of security knowing that you have a top financial professional helping you with your financial management and will reward your company with a stronger and more attractive financing arrangement.

In summary, B2B CFO® can help you secure a better banking/lending relationship, which will ensure your firm is well financed, has the most competitive rates and terms, and will free you up to concentrate your time on growing the business. As an additional benefit, you will be able to sleep better at night!

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