A Community Banker's Thoughts to the Small Business Owner in Turbulent Economic Times

by Nancy Mirkin

                                  

“Banking” may not be the most popular topic in the media today, however there is a definite silver lining when it comes to community banks. Community banks are on the rise. They continue to be a major source of lending to small businesses. (And yes! Community banks are lending right at this moment as you’re reading this article!).

In the real estate industry the 3 key words: location, location & location are renown. 

In the Community Banking World the key words are Local, Local & Local!

What does that mean to the small business owner? It means you have numerous advantages in dealing with your local community bank:

• Community banks themselves are small businesses; they understand small businesses’ needs. They are “relationship” bankers.
• Community bank officers know the local landscape and nuances of doing business, and are deeply involved in their community.
• Most community banks are willing to consider character, family history –the whole story of your business versus the impersonal qualification of the big banks.
• Decisions are made locally, not out-of-state in some “out-of-touch” ivory tower.
• Deposits made in local banks go to work locally and not in some far off location. This benefits you, your neighbors, and your community.

Now is the time to establish or to maintain a great relationship with a community bank in your locale. If you have a community bank relationship or would like to develop one the steps are similar:

• Provide comprehensive financial information; prepare & present your financial statements to the bank in a timely manner, share the good news as well as the bad news.
• Understand your financial statements; be prepared to discuss changes in discretionary expenses. You will score many points with your banker if you demonstrate you understand your business’ risk in this economy.
• Know your industry, its outlook and competition. Certain Banks are partial to some industries and not others.  Find a good match for your business.
• Maintain your personal credit or FICO score, how you manage your personal expenses is a reflection of how you manage your own business.
• Change is inevitable, keep perspective and try to anticipate. Prepare a proforma income/expense statement.

Nancy D. Mirkin, Vice President of Commercial Lending, Hampden Bank

                             UMass Alumni, Class of ‘82