Your banking relationship is one of the key professional partnerships for your business. Your banking partner is responsible not just for protecting and managing your assets, but also helps arrange financing to leverage your strategic plan and provides you with insights that come from working with a wide range of businesses.
But your bank also needs to be the right size to support your needs. For fast-growing and dynamic businesses, it is possible to outgrow a bank. How will you know when that happens? Here are five signs to watch for:
Technology that doesn’t support your geographic growth
It used to be that a business that grew geographically would keep its business with a bank that matched its footprint. These days, having a bank around the corner where you can deposit your daily receipts isn’t nearly as important as the bank’s technology capabilities. As transactions have moved virtual, your bank should be able to support your cash management needs from wherever you do business and provide you with guidance and service as effectively in a digital environment as if you were in the same room. If your bank doesn’t support that experience as you grow, you may need a new partner.
A lack of expertise in the issues facing your business
As businesses grow, they need bankers who can provide advice and recommendations as much as service. If your business is reaching a size where you are engaged in succession planning and repositioning of equity, complex acquisitions or expansion, or doing more business internationally, your bank may not have the experience to provide the level of guidance you need. Working with business advisors who have been there and done that is a powerful asset for expanding companies.
A product line-up that isn’t as broad as your needs
Any bank can provide you with deposit accounts and some degree of credit, but what if you are also looking for a one-stop payroll provider, or a benefits package for your employees as you grow? Some financial institutions might not be able to offer the full range of solutions your business can use. Banking, payroll, and other benefits through a single source can help your business gain efficiencies and operate more smoothly.
Lacks the scale to support your credit or funding needs
Especially for businesses that are making big moves, working with a bank that has the resources and flexibility to support your plans is critical. When you need a larger loan or credit facility, being able to access increased financing in a timely manner is critical. You want to work with a bank that understands your business and vision and has the capability and risk tolerance to provide the financing to make your plan happen.
Not able to anticipate your challenges or properly match solutions
Sometimes it’s not that a bank lacks a certain product or capability, but that your contacts don’t have experience creating solutions from scratch or working with a broad array of resources to suggest options that may benefit your business. U.S. Small Business Administration loans are a notable example. Many SBA loans have specific guidelines, and only an advisor with SBA experience may recognize that you are eligible before you even ask.
Finding a good banking match is about understanding your own needs and the capabilities of your banking partner. It’s also about finding a bank you trust, one that takes a personal interest in your business, a broad view of your strategy, and helps you build a holistic plan. Alerus offers a team of highly experienced advisors to tailor your needs to your plan, with a wide range of technology and solutions. To experience the Alerus difference contact us today.
The information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Alerus does not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Alerus Financial, N.A. is Member FDIC.