Develop a relationship with an alternative lender and if your business is too small to share your banking needs around, at least develop a connection with another bank. Stay in touch with bankers who go to other banks.
Understand where you sit with the bank. Are you in the top or bottom echelon?
This has a big bearing on how you approach your bank and the response you will get. Learn what you could do to make yourself a more attractive (less risky/more profitable) customer.
Understand what your banker expects and how he/she is appraised. Where possible help them achieve their goals such as cross-sells.
No surprises here! Bankers don’t like surprises. Ignore your bank at your peril. Better to under promise than over promise. Keep communication channels open and make sure your bank knows what you and your business are all about.
Pay down debt when you can and try to maintain headroom in facility limits and any banking covenants.
Maintain or have access to a reserve fund or relatively liquid assets outside of the business for use in an emergency.
Heeding this advice will not guarantee bank support, but it will give you the best chance of building and maintaining the kind of constructive banking relationship all growing businesses need.
Neil Slonim is an independent business banking advisor and commentator. He is the founder of TheBankDoctor, an online resource centre designed to help SMEs understand, quantify and mitigate their bank risk.
