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Choosing a bank

What Should You Look for in Choosing a Bank and a Banker? By Barry Cohn Each year, one of every eight companies changes its banking relationship. Some companies change because their bank was acquired or their account officer moved. Others move to new banks because of service concerns, they have outgrown their community bank, or have a financing requirement. Whatever the reason that begins the process, the search for the right bank should be made like any business decision, with research, careful analysis of the benefits and costs, and based on long term considerations. Ask for referrals! The majority of companies that change banks ask for referrals. Ask your accountant, customers, suppliers, or other business owners that you know and respect. CPAs are probably the best source to begin the search for a new bank. Your accountant has many business customers who deal with many banks. Usually they have a few bankers they know, respect and trust. Interview the banker as much as the banker interviews you. Once you have a couple of referrals, schedule an appointment to meet with the banker and learn about the bank, its market focus and orientation and the background of the banker. Ask him or her these questions: ? How long have you been with the bank? ? How much experience do you have with companies such as mine? ? Do you have any experience with companies in my industry? ? Who will be handling my account if I decide to bank with your bank? ? What is the loan approval process? ? How do I compare in size to your other customers? All banks lend money, provide cash management services and have similar products. There is not much differentiation between bank products and pricing. The real difference in banking relationships lies in the personal relationship. If you company’s revenues are below $10 million and you borrow less than $1 million, most large banks service your company with 1-800-BANKING phone numbers. Independent banks and community banks still provide one-on-one relationships for their customers at this level. If your company is larger, then you should interview the bank and the banker and begin a relationship with someone you feel comfortable with, who you can count on and who is truly interested in you, your business and its success. With this information, you can determine if the bank and banker your are considering are right for you. And remember that you should be treated the same way you treat your customers and demand nothing less. Barry S. Cohn is a regional vice president for Imperial Bank responsible for the San Fernando Valley Region, including the San Fernando Valley, Santa Clarita Valley, Conejo Valley and the Oxnard/Ventura area. For more information, call (818) 379-2933.

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