Build and nurture a relationship with your banker. You want a true banker – someone who has decision-making authority…typically someone who has signature authority for $500,000 or above. Cultivating a relationship with a good banker is well worth the effort. If kept informed, that banker will support you when your margins drop, point you to other financing sources if he or she cannot directly assist, and seek creative solutions if your loan needs exceeds the limits for the bank. Because of this, follow the banker. If your bankert https://npfinancials.com.au/ leaves, follow your banker to his or her next bank. A great banker is prized wherever he or she goes so your banker will act the same no matter what institution he or she is at. If the banker leaves and you stay with the bank, you may no longer have anyone supporting you.
Business owners must establish relationships with their banks as soon as possible. If you anticipate needing financing six months hence, go in and meet the branch manager and ask for an introduction to a vice president or assistant vice president or that bank’s equivalent. Most large retail bank branch managers only have signature authority up to $50,000. If you are anything but the smallest of start-ups, this approval level will do little beyond providing initial working capital which a $500,000 per year business will quickly run through. Some community bank branch managers have greater signature authority up to $100,000 or even $250,000. Many bank vice presidents have signature authority up to $500,000.
“Signature authority” refers to the maximum loan amount which the person can approve on his or her own, without presenting a case to his or her superiors to get the deal approved. The more approval steps the loan must go through, the greater the likelihood the loan will be rejected. The better and closer the relationship with decision makers at the bank, the greater the likelihood the loan will be approved. In addition, increases or extensions will be approved even when the company encounters short-term difficulty because the banker will believe in his or her client and will be an internal champion for the client.
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