From putting in late-night hours to using your own personal funds, getting your small business idea off the ground is no easy feat. But, once your business plan is finalized and it comes time to present your loan request and acquire funding, how can you decide which bank is best for your small business?
While a bank will evaluate you on all aspects of your business plan, it is also important that you evaluate the bank to ensure you can maintain a long-term working relationship. Rather than basing your decision solely on your bank’s current interest rate, you should focus on the future of your business and how a successful partnership will lead to growth and success.
Here at Landmark National Bank, we have compiled a list of the most important questions to ask your commercial banker when evaluating a potential partnership for a business loan.
9 Questions to Ask Your Small Business Loan Lender
When determining the best bank for your small business loan, make sure to ask all the questions you need to. A commercial banker should be receptive to your concerns, and their answers should help you decide if the partnership is right for you and your future goals. Also, do not forget to trust your gut. Your instincts are an important part of the process, as you know what is best for your business.
1. What are your primary responsibilities and goals with this partnership?
Along with general responsibilities surrounding your loan request, your commercial banker should be more than someone you use to complete a transaction. He or she should have goals that align with you and your business.
Simply put, you will want a bank that is more than just a “money chucker.” The right bank should add unique value to your business outside of the transaction and interest rate.
2. What types of commercial industries and businesses does the bank work with?
It is important that your bank has experience lending money to businesses in your industry. Their understanding of your market and insider knowledge will help you navigate unforeseen situations and growth opportunities.
3. What is your local business lending experience?
You may find it important to have local decision-makers that can better understand your business and the community you serve. These local lenders may know your market better than a corporate banker on the other side of the country. Also, when considering loan decision timeframes, you may want a quick, localized loan decision to take advantage of a timely opportunity.
4. What is the bank’s rating for financial safety and soundness?
A bank’s financial safety and soundness are important, as you want to know that your bank will still be there to serve you in the future. A great source to research bank safety and soundness is BauerFinancial, as they provide star ratings based upon financial strength and longevity.
5. How will you gain an understanding of me and my business?
The more your banker knows about you, your business idea, and your business plan, the better they will be able to tailor solutions for you. Having honest conversations about your financial health early in the loan process will ultimately improve your business loan and help you reach your goals.
6. Will I have a primary point of contact?
Ideally, your commercial banker will not change on a transactional basis. You will want to build a relationship with your banker for them to get to know your business and provide services and suggestions that fit your long-term plan.
7. How does our banking relationship evolve past our initial transaction?
Banking is always evolving. Having a commercial banker sit down with you on an annual basis to go over those changes, and how they can benefit your business, keeps you on the leading edge of cash flow management.
8. What happens if I have difficulty making my payments on the loan?
While you expect to be successful, adversity can strike at any time. It is important to understand what will happen if difficulties arise and whether your bank will work with you through the tough times.
9. How will you promote my business as a customer of the bank?
Banks work with many different businesses, and some banks love to facilitate introductions and promote your business to other clients. Find a bank that will be a cheerleader for your business and help you expand your network.
Apply for Your Small Business Loan with Confidence at Landmark
When you partner with Landmark National Bank for your small business loan, our commercial bankers are here to help you through every step of the process. With local lending expertise and a drive to see you succeed, we are happy to work with you through all your questions or concerns.
Plus, with over a century of experience and a 5-Star rating from BauerFinancial, you can feel confident that you are in good hands. Don’t put off your small business project any longer—find a Landmark National Bank branch near you and reach out to one of our friendly associates.