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Dealing with your bank:help make your banker look like a hero.

There is a lot of misinformation out there about how the current economic crisis was generated. “Banks” are blamed for bringing down the economy through greed and bad lending practices. In fact, among the thousands of banks and other types of financial institutions in our country, very few engaged in predatory lending, lending to people who could not repay the loans or lending too much on the value of collateral, primarily homes.

But, just about all financial institutions are paying the price of the sins of the relatively few by dealing with much tighter regulation and oversight from state and Federal regualtors not to mention the mostly inaccurate bad press they get. Some banks are reacting to this increased regulation by tightening credit and, in more extreme cases, asking some customers to leave the bank. Other banks, primarily well-managed ones-have money to lend and maintain the prudent practices they have always followed.

So, what is a business owner to do?. In a phrase, make your banker look like a hero. He or she is your advocate and champion inside an organization that most likely does not know you very well. Bank managements and loan committees have to take into consideration more stringent rules and regulations that carry severe penalties that result in decreased profits and shareholder value.

Help your banker help those people inside their banks get to know you, get to know that you can repay what you need to borrow and that you “have your hands on the wheel.” This last point means that you have a plan for your business to manage current situations and the ability to react to changing conditions in positive ways. In other words you do the things that create a better-run and more successful business. It also means that you overcommunicate with your banker, keeping him or her up to date on good news and bad-no surprises!

In a way, the polarity of relationships between businesses and their banks has been reversed. It used to be that bankers came to make you look like a hero. Now it is your turn to do the opposite. Sure, you could say the heck with them; it’s their job. But what do you really need in the short and the long run if you want a successful, growing company? A great relationship with your bank is one important thing on your list. Find that banker and that bank and make him or her look like a hero.