Banking on Success

Build your banker into a trusted entrepreneurial adviser.

by Lesly Bailey

Creating a connection with bankers is more than just crunching the numbers, according to banking professionals in the region who detail how entrepreneurs can launch and maintain productive relationships that endure throughout the years and economic changes.

Michael Schneider, Northwest Indiana market president at First Financial Bank, says entrepreneurs bring a unique synergy to the table.

“We really enjoy working with entrepreneurs,” he says. “They tend to have a great energy, dreams, visions and ideas that they want to fulfill. They are very positive people. We help them take that vision and dream and take them from Point A to Point B.”

Schneider recommends that startups meet with a banker at a very early point in the process.

“One of the most important things that I always tell clients is, when they have an idea, always get a banker in on the idea way out in front of the need,” he says. “If at some point in the future they may borrow money, don't wait until two weeks before the check needs to be written. Meet well in advance to talk about the dream and vision of where they are going. The banker can help stair-step where the entrepreneur needs to be so that everyone understands the mechanics of how things are going to work.

“There are a lot of good bankers out there who enjoy helping entrepreneurs and putting the deal together. Get them in on the front-end of the conversation so they understand the vision well in advance.”

This extends to an emerging entrepreneur's management team, says Erica Dombey, president and executive director of the Regional Development Company (RDC), which assists small businesses with purchasing hard assets.

Dombey says, “Attorneys, CPAs, insurance agents and bankers are all important people in a small business owner's life. These people can provide sensible advice and keep any potential trouble or issues at bay. “It's best to establish those relationships early, so the professionals can grow with the business, are familiar with its history and can give the best counsel possible.”

Gregory A. Gordon, vice president and group manager of business banking at Centier, says, “A banker, attorney and CPA offer valuable professional resources, especially for someone just starting out. You get different types of advice from a banker than a CPA. It's good to get differing opinions.

“We make sure, as their banker, to get them a quality CPA, help refer them to an attorney and vice versa. It's important to maintain a good network and getting our clients in the hands of those three leads to a tripod that works together.”

After connecting with a banker on the ground floor, it's really about growing and developing with entrepreneurs over the years, says Brian Rusin, vice president and business banking manager at Peoples Bank.

“In the short term, we need to build a relationship and become a trusted adviser,” he says. “We will ask a lot of questions of the entrepreneur to help understand how they do business and what types of banking needs they may have. Then we like to uncover what they may need on a longer-term basis as well. As entrepreneurs grow, they want to make sure that their banks have the ability to grow with them … building on that trusted relationship. Our goal is to help them with whatever banking needs they have.”

“It's not so much access to credit as the relationship to the banker that is the important part,” Gordon adds. “Trust is very important between a banker and the business owner. Trust, honesty, forthright conversation … having those conversations in order to offer sound financial advice to help entrepreneurs make decisions.”

Open lines of communication are the keys to a strong, long-term connection, says Chris Chatfield, vice president of business banking at First Merchants Bank.

“At the front end, first and foremost, we are seeking a long-term mutually beneficial relationship with clients and prospective entrepreneurs. That's the cornerstone and foundation of what we want to do,” he says. “We want to provide good financial advice and that really doesn't constrain us to the commercial world but the holistic financial spectrum: from wealth management to residential and car loans. We are really talking about an all-inclusive look at finances.

“We are that financial partner and we want to know when it's good and when it's bad. When it's bad, we should be one of the first ones to know and not read about it in the paper or have the keys dropped off when the building is closed.

“Being able to discuss challenges is a critical component of keeping the relationship healthy,” Chatfield adds.

“Commercial lending is not black and white,” he says. “It's not just in a box … part of what makes up what we do is creativity every day, on the structure of things, for clients that makes sense for them and is mutually beneficial. We can help provide solutions, even when it's bad, as to how we're going to move forward. It really goes back to communication.”

According to Gordon, “Sometimes we have to give, in a professional way, constructive criticism. Especially if we have 20 or 30 years' experience doing what we do, we have seen what has worked and not worked. Without breaking client confidentiality, we can share advice and ultimately provide them with the tools to make good decisions.

“Don't hide things from your banker. It's not always rosy. There's downturns, recessions. But with open dialogue and honesty, more often than not, we can work through those issues. Don't be afraid to ask for help. It's always easier to have that conversation initially before things get sideways.”

Entrepreneurs need to take time to sit down with their bankers on a regular basis, no matter what is going on with their businesses, Rusin says.

“With regular meetings, we can discuss the successes as well as the challenges. You cannot be afraid to talk about issues. If there is an existing relationship, your banker will be able to make a quicker decision and address any challenges in a timely matter.”

Dombey's advice is to stay in contact with your banker at least twice a year. “Talk to them a year before you plan on making any big changes, moves or expansions. They can look at your financials with you and give sound advice on how to proceed.

“They can also help you avoid any challenges you might encounter along the way. Remember, your banker wants you to succeed as much as you do.”

Dombey has seen the same clients utilize the Small Business Administration's 504 Loan Program over the years, creating a base to build upon. The 504 Loan Program helps finance owner-occupied commercial real estate and large equipment.

“One of our clients has financed six Dairy Queen locations with us,” she says. “Another has financed four Culver's locations. We have several manufacturers that used us to first purchase their building, then returned for two or three expansions on the property. Because we were familiar with the business owners and their financials, it was much easier to get comfortable with the new projects, and loan approval is much quicker.”

Bankers can also be an important source of additional partners and resources that entrepreneurs may need, according to Chatfield.

“We have partners to help think outside the box,” he says. “We're a certified lender for the SBA. We work with other state and local programs including the RDC, SBDC (Small Business Development Center) and SCORE. They can really help with a business plan, projections or marketing. They're an important part of what we do day-to-day and we couldn't do it without our partners out there.”

Schneider says entrepreneurs should really see their bankers as partners in their journeys.

“Once the relationship is established, bankers are their advocate,” he says. “Never be afraid to pick up the phone and tell them what you are thinking: an expansion or new piece of equipment. A couple years ago, a client asked me to go to a trade show to see a piece of equipment and how it works and would affect the business. He could have just called me up, but he wanted me to see it and be part of that vision. Any good banker is an advocate for the client and wants to be part of that team and appreciates being brought into a decision.”

Rusin, who has been in the industry about 20 years, says traveling along with entrepreneurs and watching them hit milestones, such as a new facility or expansion, is a rewarding component of his role.

“There is a sense of gratification being able to work with entrepreneurs … see them obtain their goals and know that I had a hand in assisting them do that,” he says. “That's the reason I enjoy what I do, to see the successes of our customers.”

Witnessing the impact of flourishing businesses on the owners, employees and beyond instills a sense of satisfaction in the day-to-day life of a banker, Schneider says.

“I've been with First Financial 15 years and I have clients from when I started 15 years ago that I still have today,” he says. “To watch them grow from a small to a bigger facility and see the lives that it touches … that's probably the most rewarding part of the job.

“It's amazing to see how they grow and add employees and how that affects and boosts the economy and supports families in Northwest Indiana.”