Start a Business with Relationship Banking
Do you have a great idea you think would be a profitable business but are unsure of where to start? Are you overwhelmed with the business side of getting your innovative product out in the world? Is not having enough capital keeping you from making your dream a reality?
You are not alone. Many people face the same obstacles in starting a new business. A great idea and a market-ready to receive it but no clear roadmap on how to get from point A to point B. While each potential new business may have a slightly different road to success, almost all start with needing some additional funding to get things moving. A recent conversation with some local bankers revealed some interesting information about moving your business concept from a dream to reality and why it’s important to have someone with a comprehensive approach to reaching your business goals on your team.
Starting the process: You should do some homework before you make an appointment with the bank. You will need a statement of your personal finances, a copy of the previous two years' tax return, and a business plan. The business plan will need to be a detailed account of how you expect the business to run including things you might not have thought about in the initial idea phase such as location, market competition, the life cycle of the business and the anticipated costs of things like equipment, utilities, infrastructure, labor, insurance and consumable products. Business plan templates are available online.
Choosing the right bank: Historically bankers have had specialized jobs with very little overlap between departments, but a more holistic approach to banking is gaining traction, especially with business customers. You need someone who will bring all the benefits of a community bank to you instead of sending you down a proverbial financial conveyer belt or forcing you to fit into the predetermined box on their corporate form. Having a banker who cares enough to build a relationship with you and fully understand your business needs can be the difference between success and failure. Brad Davis, Relationship Manager at State Bank, summed it up with, “You need a bank that is big enough to provide you with the resources to help your business grow, but small enough that you can get answers and solutions in a timely manner from someone who really cares about your success.”
Caring about YOUR success is key, you want a bank that will be honest with you about the feasibility of your proposal and isn’t just looking to increase their bottom line or to string you on forever waiting on an answer. Anthony Pinkham added that being with State Bank gives him an advantage in helping customers, “Because decisions are made locally by people who know the area which allows us to develop personal relationships with business owners and operate very efficiently as their banking partner." Wherever you choose should make you feel valued, comfortable and understood.
What happens next: When you sit down with your Relationship Manager they will go over the financials, taxes and business plan, you previously prepared. They will work with you to identify the financing needs of the business and the loans that are best suited to those needs.
The Credit Services Team will then evaluate the loan request to determine the ability of the business to repay the loans. At State Bank, that team is overseen by Laurie Burgess who explains their role this way, “We focus on the five “Cs” of credit to assess a business loan request. It’s broken down like this, the:
- Capacity to repay as evidenced by the financial information,
- Character as evidenced by the owner’s credit and experience,
- Collateral to secure the loan,
- Capital as shown by the owner’s financial investment in the business, and
- Conditions that may impact the business include competition and the current economy.”
Once the Credit Services Team has reviewed the application you will receive an answer from your Relationship Manager. If you both agree to the terms the closing process will start. The Loan Services Team will prepare all the necessary paperwork and request any type of appraisals, title work or external documents needed. Having people on your banking team that has built relationships with the community and service providers will be a great asset to you here.
Get the most from your bank: Relationship banking has been important throughout this process, but it really comes into play now. Your Relationship Manager partners with you to make sure you’re taking advantage of all the business solutions they have to offer. They will work on your behalf to make sure you have the right accounts, determine if you need Treasury Management Services and help you best utilize electronic and mobile banking services. They are your steadfast resource for all things banking related and you owe it to yourself to give Relationship Banking a try.
If you’re ready to turn your dreams into reality, or if you don’t feel like you have a real relationship with your current banker, make the move to State Bank. Call (903) 831-3057 or email [email protected] to get started today.