Edward French

Vice President and Commercial Banking Team Leader for Citizens Bank; Topic: Finding the Right Banker

Keys to Finding the Right Bank and the Right Banker

There are forty-two banks and twenty-eight credit unions operating in the State of New Hampshire. As a business owner, you may wonder about the need for this number of financial institutions. Aren’t they all the same? They all take deposits and they all make loans. How do you as the business owner, in need of a commercial loan, wind your way through this banking jungle? I submit that finding the best bank is a relationship building exercise. Selecting a bank based simply on price or convenience is shortsighted for even the smallest business. More important than price is selecting a bank that shares your values. Selecting a bank, that can provide for your present and future needs. The best bank is one that is consultative, and not simply an order taker. You should insist on a bank that can add both tangible and intangible value to your shared relationship. The best bankers are the ones that develop relationships with their customers and are a champion of their customer. So how do you approach this daunting task? Here are some questions to ask and things to consider. Does the banker know your industry? Does the banker take the time to learn about your business? What level of expertise does the banker bring in meeting both current and future needs? What is the decision making process? How quickly can the bank provide an answer to a loan request? Is the banker experienced and professional? Is the banker accessible and is he or she supported by a team of professionals? Does the bank provide the suite of products that meet both your current and future business needs? (Will you outgrow the bank?) Does the bank share your core values? What should be obvious is that finding the right bank for your business is a task that takes time and thought. If you follow these suggestions you will find that the long list of banks has been whittled down to one or two that will truly be a good fit. Investing time at the start of the process will pay dividends in the future.
1 2007 NH Business Review Book of Lists; Vol. 28, No. 28
Edward French Citizens Bank

About Edward French

Edward French is a 26+ year veteran of the financial services industry. He manages a team of commercial banking professionals whose role is to meet and exceed the expectations of commercial clients and prospects through the offering of state-of-the-art banking products and value-added service. Mr. French is the Chairman of the Amoskeag Business Incubator, a member of the Heritage United Way Investment Committee, and a member of the Raymond NH Budget Committee.

Questions and Answers

QUESTION: What does the bank require from an applicant applying for a small business loan? Or...how can an applicant be prepared when seeking financing from a bank?

ANSWER: These are two great questions. Banks all require the same basic information from commercial loan applicants.

For established businesses, expect to provide the following information:

· CPA-prepared financial statements and/or business tax returns (usually two or three years)

· Management-prepared interim financial statements

· Business loan application

Depending on the borrowing request, other information may be requested, including accounts receivable and/or accounts payable aging.

For start-up companies or early-growth stage companies, banks will require a well-documented business plan and realistic financial projections.

Business owners are asked to provide personal income tax returns (two or three years) and a personal financial statement.

The bank will use this information to assess the applicant’s ability to service the requested debt.

The best-prepared applicant will have thought out their borrowing request and be able to clearly articulate their need to the banker. Be prepared for the banker to ask questions. Remember, you are the expert of your business, not the banker. Explain your business model; that is, how do you make money. If there have been any financial bumps in the past, anticipate the banker’s question and answer it before it is asked. Being prepared will make the process of applying for a commercial loan a smoother process.

QUESTION: It seems that most commercial banks seek to serve business customers who generate revenues in the millions of dollar annually. What advice can you give to small businesses who need more than a local community bank, but who are not "big enough" for a commercial bank?

ANSWER: First off, do not equate the size of your business with the size of the bank. The largest bank may be the best fit for the smallest business. You will determine this by practicing the suggestions I make in the article on selecting the right banks and bankers.

Most banks will provide commercial banking services for a continuum of commercial clients, from the smallest to the largest. Full service banks, whether saving, mutual or commercial will provide an array of commercial banking products designed to address the needs of various borrowers. My advice to business owners looking for commercial banking services is to develop a relationship. Ask questions of the banker to determine whether the products and services you need are offered and if they are not, then look to another bank. Banks that truly serve the communities in which they operate do not turn away business clients, regardless of the size.