The Most Bank for Your Buck

In early 2005, Eagan-based Ergotron, Inc., went shopping for a new banker.

The company, which makes mounting products for computer equipment, was looking toward the future, anticipating growth, and decided to conduct a search that would reveal the best bank for the business going forward. Ergotron needed international banking—it has operations in France, Germany, the Netherlands, the United Kingdom, and the United States—online banking, competitive interest rates, 401(k) services, and the possibility of fixed- or variable-rate loans to cover the company’s building mortgage, equipment financing, and a revolving line of credit. And the company’s majority owner wanted to avoid personally guaranteeing Ergotron’s loans.

To find the right bank, Ergotron executives considered six different candidates. They created a presentation describing their needs, and asked each bank to come back with a proposal.

Bankers advise clients to view them as trusted advisors rather than just vendors.

A pre-panic search for a bank also lets your commercial banker get to know you and your business, and suggest products and connections that may help you. Ironically, that knowledge may also help you get financing quickly if the need arises. “You can discuss future financing needs,” Wilmer says. “That way it’s not a surprise when you walk into the bank and ask for a loan.”

Before you talk with potential bankers, get a clear sense of the banking variables that matter to your firm. “Be prepared to ask the banker questions—what kind of business he or she typically works with, size of loans, fees, interest rates,” says Mike Bilski, executive vice president of Roseville-based bank North American Banking Company. And know which answers matter most to you.  Defined priorities will help you find your company’s best fit.

Consider what size bank might suit your business. You may get more personal service from a smaller bank; on the other hand, a larger bank will likely have more branches and may offer more services than a smaller one. A larger bank may also have a higher lending limit than a smaller one.

Ask what services the bank offers, in addition to the standard deposit, savings, checking, and loan services. At Ergotron, for instance, executives were pleased to discover that Wells Fargo offers automatic sweeps, which move extra money into an investment account or credit it against debt principal. “Any surplus funds are automatically invested or go toward paying down our line of credit,” says Greg Mohwinael, Ergotron’s chief financial officer.

You might be more impressed by remote deposit services, flexible loan payment dates, or other bank services. “Don’t be hesitant to talk about what your needs are and what services would be helpful to your business. Maybe the banker would be in a position to offer help,” says Perry Mead, president of First Western Bank in Eden Prairie.

Find out the bank’s lending limit. That number should comfortably include the loans your company will likely need as it grows. Ask about interest rates and fees for services. Stiff competition between banks means those numbers probably won’t vary much, but you may still find a bargain.

Minnesota banks can’t pay interest on commercial checking  accounts, but many banks do offer an earnings credit on average account balances. Commercial customers can use those credits to offset service charges. Consider what your average deposits are likely to be, and ask the bank what credits that average will earn, says Gail Mikolich, executive vice president and chief operating officer at Minneapolis-based Northeast Bank.