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Business Resources

The Mind of a Commercial Banker

Have you ever wondered what your commercial banker is really thinking when they talk with you about a credit request? Well, wonder no more!

See the top 6 things going through our mind below. You’ll find we sincerely start from a place of helping before selling, of listening before recommending.

1. I wonder who else they have already talked to about this?

Sometimes we are an insecure lot and doubt ourselves. Our experiences have taught us that usually we are one of the first to be called but not necessarily the first to be called. So we ask ourselves, “Are we merely a commodity dealer in the dollar or does the client want something more from this?”

2. Does the business need a loan for what is really being requested?

If a commercial banker is really good at what he or she does, then he/she should be asking more questions than giving answers in the first, second, third, and sometimes even fourth conversation. Often times the request is for one thing (a line of credit, for example) when in actuality the client really wants a sort of credit facility that allows them to quickly purchase fixed assets. If the commercial banker is doing his/her job right, he/she is asking the questions which get to the root need of the request and will tailor a recommendation to fit the client, not just go with the first option.

3. We want to make loans!

I had a client one time tell me he knew he might be stretching to do something in his company. When I told him that I was concerned about making the loan for his request, he replied back, “you guys don’t make any money if you don’t make me the loan . . . then again, if you make me the loan and it goes bad you can lose a lot of money!” Indeed, this client was spot on. We want to make loans. We make money by making good solid loans. But we also don’t want to put our clients in a position whereby they will lose money or worse yet, lose their company. So, we have to be prudent, we need to structure the loan wisely, and we need to make sure that the client and the bank are both on the same page.

4. Your business’ value proposition

Recently I was meeting with a developer and asked their team about who they were competing against. They rattled off a number of different competitors but then quickly followed up with, “but you know, Chris, the real difference between us and them is that we . . .” They clearly and concisely could tell me how their company and project differed from so many others. And when I checked it out, they were right, it made sense, and it truly works for them in their business model. So, does your commercial banker know about your value proposition? If not, can you clearly and concisely tell your banker what makes you different?

5. Do you have a plan for the Good, the Bad, and the Ugly?

Your commercial banker is wondering if your projections are accurate. And here is the secret: he or she doesn’t believe that they are most of the time. Why? Because too often projections appear to be numbers that are pulled from thin air with little background on how they were determined. But if you can show your banker you not only have a projection, but it’s backed up by concrete data, now you have something. Furthermore, if you have looked at various what if scenarios to determine the “Good”, “Bad”, and the “Ugly”, of those numbers, well now your banker is impressed. We like to know our clients have thought about downturns and have processed through how they will work through them.

6. Finally, are you desirous of a relationship or merely a one-off transaction?

Most community-based Commercial Bankers want to be more than the loan du jour. They want to have a phone call similar to the one I received this afternoon from a long term client. He was looking for some equipment, wanted to know to know how we could help him, and wanted to have a general sense of what he was looking at in payments. But the most important part of the call was not the rate, the terms, or the amount; it was the fact he and I have developed a great working relationship and I was able to ask him enough about his business to truly know what was going on with this particular project. He knows we will take excellent care of his needs now and in the future because we know what is going on with his company.

You see, commercial lenders aren’t really too complicated or intimidating. Our mindset is simply to listen and to help your business achieve its goals, both now and in the future. We want to do what is best for the client, not just what shows up on a commercial scorecard reviewed by senior management. If we are doing our job right, then the rest of that stuff falls into place. What we really want is the relationship, an understanding of the company, and the ability to talk with an owner who wants those things from his or her banker. When those two pieces come together, it is a beautiful and mutually beneficial partnership.


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