Who helps small business navigate the lending arena?

Small business clients may initially be introduced to their local business banker through contact with their local retail bank branch, or from a referral from their CPA, financial advisor, or business attorney.

As noted by another post, the SBA (Small Business Administration), SCORE, and Certified Development Corporations all provide start-up counseling and financial assistance to new businesses.

Many commercial lenders in the marketplace actively solicit businesses for deposits, lines of credit, real estate loans, cash management services, etc. Lenders are required by bank management to network, solicit new business, and prospect for new loan relationships. Lenders are typically active in the local community through service clubs, the local Chamber of Commerce, and trade associations.

Small businesses develop relationships with their lender over time as their business grows. Lenders will typically meet with their borrowers frequently throughout the year or as needed.

A small business may start out with a business checking account and a small line of credit. Over time, however, the lending needs of the business may evolve and become more complex. A borrower may require financing on inventory, vehicles, new equipment, commercial real estate, etc. Many banks cross-sell their larger banking clients with treasury management services, wealth management services, etc.

The business banker differentiates himself by serving in an advisory capacity to the business owner. By carefully evaluating and analyzing the financial health of the business, a business banker can make suggestions to improve the financial health of the company. Or the business banker can make introductions to other business professionals in the community that can help the business save money.

Rates and terms are very important, but the business banking relationship with the borrower is also paramount. Service, dependability, reliability, trust, and a good working relationship are all part of the equation, especially on larger, more complex business loans. If rates and terms are competitive with the marketplace, the other soft factors noted above can make a difference in a competitive bidding scenario.

Borrowers have multiple banking options, from small community banks to large, national banks. Bank competition is fierce, and borrowers have many choices.

While credit has certainly tightened, especially as of late, borrowers continue to shop for the most competitive terms and rates, especially on smaller business loans. Some borrowers maintain loyalty to the bank where they hold their main banking relationship, and other borrowers have multiple relationships depending on their borrowering needs. Builders, for example, typically borrow from numerous banks in the community