Get insights into how client relationships and lending practices connect from some of our lending leaders.
A professional relationship between your business and ours is inherent in the lending process. But having that personal relationship between you and your lender can make it even better. Recently, we sat down with two of our experienced First Financial Bank lending advisors, Scott Walker and Brad Ogletree, to learn what happens and how client relationships interact with the lending process. Together, we’ve put together these insights and tips for you.
Tip 1: Help the lender understand who you are as a person
There are many details that are provided when you apply for a business loan, including your business plan and financial information. That’s great, but it’s not the complete story. Who are you, the borrower, as a person? Though somewhat subjective, there are things you can provide the lender that will be “green flags” for supporting your loan application:
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- What is your history, personally and professionally? The more experience you have in the industry and your reasoning for why you are looking to start, build, or expand this type of business can show us what you bring to the table. “I’ve been a banker for 32 years. If I tried to take out a loan to become a mechanic with my own repair shop, I would need to provide a lot more information than just a business plan for it to make sense. The more details you provide to highlight the expertise and experience you bring to the business helps to illustrate why you are more likely to succeed,” says Scott Walker.
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- How do you handle your personal finances? If your personal finances have been well managed over the years, as demonstrated by a solid credit score and appropriate debt repayment, it reinforces the impression you would do the same for your business.
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- Have you done your due diligence in the borrowing/lending process? In addition to your research into the business and market, we want to see that you are an informed consumer with intelligent questions about the loan process. Again, this demonstrates you are actively engaged in being a good partner.
By rounding out your story with the above items, you can reduce the risk of creating “red flags” by clarifying and enlightening your lender with “green flag” information.
Tip 2: Communication is key, especially when the industry struggles
It can be challenging to anticipate what will happen in the marketplace and financial services: Will the interest rates increase or decrease? What is the market opportunity for your business based on supply chain and tariffs? Are there opportunities to enhance or protect our financial standing based on what is happening?
Staying in touch with your lender is important to help manage risk and leverage opportunity. Communicating early and often can help you understand what is happening and what can be done to handle it. The information you provide can help us better guide you through the process and any adjustments that may need to occur if changes are needed.
It’s important for both sides of the relationship to be transparent and honest with each other. Your loan officer may not have all the answers for you at the time – and you may have challenges you need to disclose. According to Brad Ogletree, “A year ago, bankers were anticipating a lowering in the interest rates, but they have not changed. If another lender is telling you what the rate will be in the future, they are not being truthful.” By being upfront with each other and not trying to gloss over issues, we can use the information we do have to get the best outcomes possible for you.