Relationships Matter.

Businesses need banks like they need employees. Without access to bank credit, many companies would not be able to survive or thrive. If you’re managing a growing business, the Five Cs that banks consider when reviewing a loan application include:

  1. Credit history
  2. Cash flow
  3. Collateral
  4. Concept
  5. Character

Although the first few are important, the real surprise is that concept and character can be the most important of the five. Those two attributes can make all the difference when applying for a business loan.

Why concept and character? Banks don’t loan money to businesses; bankers loan money to business owners. In addition to the financial data required to secure a loan, your relationships and reputation matter more than you think.

So what can you do now to be ready when you need a loan?

Build a strong, dynamic relationship with a banker.

It takes time to build successful business relationships. Begin developing your business’ connections especially as it relates to your banker. Get to know them and allow them to get to know you and your business. When it comes time to apply for a loan, your banker will be able to support your application based on your trusted relationship.

Show that your business can profit and build a positive reputation

A banker will evaluate your company’s profit opportunity and reputation as it relates to your industry. Your affiliations and customer base are critical to the success of your business, but equally important are your plans for generating income to repay the loan.

Expect more from your banker.

You work hard to build your business. Expect your banker to work hard for your business, too.

Choose a banker who invests the time to understand your needs and recommends solutions to help your business prosper. A banker could, and should, help you with multiple aspects of your business—not just lending.

If you don’t currently have a strong rapport with a business banker, start reaching out to your network for referrals. Based on the trusted feedback you receive, schedule interviews for bankers that meet your requirements and pick someone who you can build a lasting relationship.


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