Entrepreneurs: building trust with your bank

Whether it’s for your cash flow needs or to guide you in the financial management of your business, your banker is a valuable ally. Maintaining healthy, trusting relationships is essential for the well-being of your business. How can you strengthen your relationship and what best practices should you establish? myLIFE offers you some advice.*

To grow and prosper, your company needs the support of financial partners. More than just an intermediary for obtaining a loan, your banker is ideally a true ally who supports you throughout the life of your business: company creation, opening a business account, credit financing, cash flow needs, provision of payment methods, energy transition, overdraft authorization, management of guarantees, debt restructuring, strategic advice, business transfer, etc.

You will interact with him during the key stages of your business development, but also to face possible more difficult periods. It is therefore in your best interest to maintain a relationship of trust with your bank so that you can call on its services in both good and bad times. Here are some common-sense recommendations to help this trust grow on both sides.

1. Be transparent about your company’s situation

Trust-based relationships require transparency. There is no point in disguising reality or hiding difficulties. Give your banker a realistic view of your company, your needs, but also your expectations. In any case, he will examine your company in detail, since he is obliged to assess your overall financial situation in order to measure the bank’s risk exposure.

Start on a solid foundation and be honest with him. Whatever your project (starting a business, acquiring premises, expanding internationally, etc.), prove to him that you have mastered your case: present your idea and its added value, show your knowledge of the market, anticipate risks, propose solutions, highlight your strategy, showcase your expertise and experience, your contacts, etc. In short, be professional and consistent.

This first requirement is not only about making a good impression. Above all, it is essential if you expect your banker to do a good job. In fact, remember that to support you properly, he needs to understand your business and the specific workings of your activity. You will inspire confidence by demonstrating your seriousness and the potential of your project.

Extra tip: be exemplary from an administrative point of view: keep your commitments, pay your dues on time, manage your cash responsibly, strictly comply with your tax and accounting obligations, etc. The more excellence is your rule, the more seriously your bank will consider supporting you during turbulent periods.

Show that you understand your bank’s expectations and remember that it also has very strict legal and regulatory obligations to comply with.

2. Provide accurate information

Share precise data and concrete elements that your banker can use to support your projects and requests: turnover, profitability calculations, updated balance sheets and income statements, cash flow trends, projected budgets, etc.

The goal is to put together a solid and well-documented file to justify your requests and allow your contact to have an objective view of your financial situation. Transparency is good; accuracy and thoroughness are even better.

Show that you understand your bank’s expectations and remember that it also has very strict legal and regulatory obligations to comply with (notably regarding the fight against money laundering and the financing of terrorism). It must ensure throughout the relationship that the transactions you carry out are consistent with what it knows about your business. By complying with its requests for information, you make your interactions smoother.

Extra tip: don’t hesitate to come accompanied by an expert, such as your accountant, who can present your company’s financial data clearly and in detail.

3. Keep your banker regularly informed

Trust is built over time, and communication with your bank should not only happen when you have a request to make. Get into the habit of regularly communicating with your banking advisor: inform them of important changes happening in your company, updates on your financial situation, discuss your development projects, your concerns and questions, etc.

By following your progress, your banker will better understand your requests and be able to rely on a history of good relations to make their decisions.

By following your progress, he will better understand your requests and be able to rely on a history of good relations to make their decisions. They will also be more willing to accept potential financial setbacks.

Regular communication will also give them better visibility of your company’s financial health. They will be able to implement an action plan to avoid obstacles they have identified in advance.

Extra tip: if appropriate, invite them to visit your company, show them the projects they helped finance, or invite them to your client events. This will strengthen your relationship and allow them to see for themselves the potential of your business and the seriousness of your day-to-day management.

4. Anticipate complications

Bankers do not appreciate being confronted with a fait accompli, especially when problems arise. When faced with issues (declining figures, late payments, commercial disputes, etc.), do not wait for the situation to deteriorate before discussing it. Be proactive and clearly present your concerns or difficulties. Your anticipation and honesty will be especially appreciated, as they allow the banker to do their job better. Your successes and failures are also, indirectly, his. If a storm is brewing, he also needs to prepare for it in order to help you weather it.

You can then find solutions together (overdraft facilities, overdraft authorization, short-term credit, deferred payments, etc.) and put a strategy in place. The sooner you discuss potential problems with your banking partner, the more options he can offer to help you overcome them.

Extra tip: Don’t forget that your banker is a valuable source of advice for your company’s financial management. He can leverage his network and guide you towards solutions to help you get through tough times and ensure your growth.

5. Offer him guarantees

Lending money and providing financing solutions involves risks for your banker. Of course, it’s his job, but he needs guarantees to protect himself in case of non-payment: personal guarantee, mortgage on a property, collateral, as well as equity contribution, investor participation, government assistance, etc.

Reassure him by showing that you are trustworthy and ready to secure the transaction. The stronger your guarantees, the more arguments you will have to convince him when you submit a request.

Extra tip: In addition to your financial data, highlight your non-financial indicators: trustworthy partners, a strong team, proven internal processes, a good reputation, etc. All these elements demonstrate the solidity and seriousness of your approach.

The relationship with your bank is very different depending on whether you limit yourself to your company’s activities or also entrust it with the management of your private assets.

6. Entrust your private assets to him

The relationship with your bank is very different depending on whether you limit yourself to your company’s activities or also entrust it with the management of your private assets. By expressing your trust in the proper management of your assets, the bank has even more reason to trust you when it comes to financing your professional activities. Furthermore, by having a holistic view of your situation, the bank is able to serve you better on both fronts.

Extra tip: request a discussion on this topic and find out how your bank would consider a stronger collaboration in this regard. Universal banks have the advantage of being able to support you comprehensively for both your private and professional needs.

As you will have understood, a relationship of trust is built over the long term. Consider your banker as a true strategic partner rather than a mere intermediary for obtaining financing. By being honest, responsible, and favouring constructive dialogue, you will maximize your chances of gaining his support. Keep in mind that it is in everyone’s interest for your business to develop in a healthy and sustainable way. Good luck!

* Content translated from French by the BIL GPT AI tool