Definition: The rapport you establish with the bank with whom you conduct
business transactions, which could help smooth the way when it
comes to loan applications or special requests
Given the challenges of working with a big bank, many
entrepreneurs are taking a different tack. Instead of wooing the
big commercial institutions, they're courting community banks,
where "relationship banking" is the rule, not the exception. Even
given today's banking climate, it's easier to get a startup loan
from community banks, according to the Independent Community
Bankers of America. They can be a little more flexible, don't have
a bureaucracy to deal with, and are more apt to make character
loans.
But don't get the idea that obtaining a loan from a community
bank is a snap. You'll still have to meet credit and collateral
requirements just as you would at a larger institution. The
difference: Smaller banks tend to give more weight to personal
attributes. If the business is located in town, the banker likely
already knows the entrepreneur, and the family has lived in the
area for years; these things count more in a community bank.
Whether the bank you target is big or small, perhaps what
matters most is developing relationships. If you've done your
personal banking at the same place for 20 years and know the people
with authority there, it makes sense to target that bank as a
potential lender. If you don't have that kind of relationship at
your bank, start to get to know your bankers now. Visit chamber of
commerce meetings; go to networking events; take part in community
functions that local bankers or other movers and shakers are a part
of. A banker with a personal interest in you is more likely to look
favorably on your loan application.