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Jan 23Glen Katlein

Have You Hired The Right Bank (continued)

Jan 23Glen Katlein

original article  shared by Partner- Brian Christian

It is entirely appropriate for a business owner/CEO to do some self-examination first. A good start is to ask some or all of the following questions:

• What do I want out of my bank besides money?

• Can my internal controls be enhanced with cash management tools? such as: Positive pay.

• Dual controls over electronic funds transfers and check signing. Investment sweeps of idle funds.

• Automated advances from and principal payments to our line of credit.

• How much time am I willing to spend educating a bank about my business?


• What am I financing today (in terms of assets) and how do I expect that to change over the foreseeable future?

• What kind of growth can I reasonably sustain and how much growth am I comfortable with?

• From an outside perspective, what would someone (a banker) perceive as operational risks?


Almost without fail, I find that bankers are comforted to know that a business owner/CEO has gone through something resembling the above exercise, because it leads to a healthy discussion of the business and the bank’s ability to meet its needs. Below is good example:

• What kinds of cash management programs do you offer and how might they benefit my company and strengthen our internal controls over cash?

• What do I have to provide you with so that you are comfortable with, and confident in, our ability to profitably run our business?

• Currently today, we have a term loan on some of our equipment, and a line of credit that finances our accounts receivable and inventory.

• We currently lease our building, but have the right of first refusal to purchase it. Can your bank finance all of this for us or will this be a problem in the future?

• We have historically seen top line revenue growth of 10-15% annually with spikes of up to 20%. Does this present a financing issue for you over the next few years?

• We operate a fleet of trucks that transport petroleum products. As such there is some risk of environmental contamination both on and off-site. We do have internal policies and procedures vetted by our insurance underwriters that mitigate most of it. Do you see this as an issue in obtaining financing through your institution?



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