How to Find the Right Commercial Banking Partner

When financing is needed for growth, businesses have two primary considerations: how to secure that financing and how to put it to use in ways that will lead to sustainable and lasting business performance. The ideal commercial banking relationship will be one that helps guide businesses in selecting the right financing options, as well as meets clients where they are in their growth journey.

Finding this ideal banking partner is essential for meeting long-term business goals and building beneficial relationships. It is a task that requires considerable research into your organization’s unique needs and the bank’s capabilities and reputation.

According to Michael Walker, executive director of middle-market banking in South Florida, finding the right commercial bank is not only about identifying the institution willing to provide capital. It is also important that the relationship manager provide advice on how to ensure the capital is structured properly and put to good use within your company.

“During these uncertain economic times, we are seeing long-tenured, quality companies within our markets hitting bumps in the road and their institutions are unwilling to work with them to devise long-term strategies to help them,” says Walker. “All companies — but especially growth-minded companies — should select a banking partner that ‘gets’ them and their business and can deliver both the liquidity and guidance to facilitate long-term growth.”

1. Define your business needs and financial goals.

   
   In a CGI survey of corporate banking clients, more than 55% said they want a bank that acts as a “strategic and long-term partner.”1 As you grow, you need bankers committed to your company and its success. This means access to forward-thinking and sizeable financing to support mergers and acquisitions, market expansion, business development projects and other capital needs. Think big and think long-term: Does the bank have the capital assets to support your growth? Can the banking team help propel your business to the next level?
   
   Dive deep into your company’s financial requirements for the immediate and distant future. Identify what affects your cash flow and how your bank can support you. Setting clear financial goals and objectives helps to appraise a potential banking partner.
   
   In addition to confirming necessary capital assets are available, there are other factors to consider when choosing a commercial bank. To determine if your current banking partner is addressing your needs, you might ask the following questions:
   
   • Does the bank offer the services I want?
   • Am I satisfied with the attention I’m receiving from my business banker?
   • Do I feel valued as a client?
   
   Depending on your industry, size, preferences, and service needs, some capabilities will be more important than others. Decide what's essential to your business goals and establish upfront expectations.



2. Evaluate the bank’s reputation and stability.

   
   Reputation should be a non-negotiable element of your business banking relationship. If a bank is in the news for the wrong reasons, look elsewhere. You need a bank that is stable, well-resourced, capable and innovative. To learn more about a bank start with:
   
   • Online reviews and testimonials to see what account holders are saying on sites like Google and the Better Business Bureau.
   • Financial ratings and reports to evaluate a bank’s performance according to Moody’s, S&P Global and Fitch.
   • The bank’s regulatory compliance history to see how well it manages customer data and other industry requirements.
   
   Ultimately, you want to associate your brand with a bank that shares your corporate values and supports your business vision.



3. Expect personalized attention from your commercial banker.

   
   Your business deserves personalized attention from your entire advisory team, including your commercial banker. As a client, what are your expectations for the banking relationship regarding proactive outreach, responsiveness, and deal management? Proactive communication and anticipation of needs in relationship managers was important to 73% of respondents in a recent Deloitte survey.2
   
   What do commercial bankers do? Also known as “commercial banking relationship managers,” these professionals understand your financial goals and can offer products tailored to your needs, whether loans or lines of credit. Affinity with a commercial banker is important, as you’ll have someone advocating for you in front of the commercial lending committee when they are making financing decisions.
   
   Moreover, you want to have a banking relationship that will withstand the ups and downs that all businesses experience over time. Talented, dedicated bankers should be an integral part of your team. These trusted advisors can:
   
   • Address your business’ unique needs. Commercial bankers who are aware of your niche’s typical business cycles, regulatory changes, and key performance indicators add value to the relationship. Some bankers know your industry so well they can quickly point out opportunities and warn you of pitfalls. They can help you navigate risk, offer ideas you haven’t thought of, and provide custom solutions based on your specific business circumstances and goals.
   
   
   • Connect you with the right people. Knowledgeable commercial bankers can also refer you to other trusted advisors with specific skills and business intelligence you might need, such as insurance and legal professionals. Your banker will likely also have other clients with experience relevant to whatever business decisions you are contemplating and can help you frame the issues you are facing.
   
   
   • Help you manage a variety of business challenges, including shifting economic conditions, fraud, margin compression and more. Savvy commercial banking relationship managers stay attuned to the financial environment, as well as geopolitical issues and other influencing factors, so they can offer insight to better inform your decisions.
   
   Seek out a financial institution with professionals who are interested in delivering a positive client experience, including reducing pain points and red tape, and streamlining processes for greater efficiency. Be sure you're a priority client. You want to be top-of-mind with your banker.



4. Evaluate banking services and products.

   
   Most companies need the basics such as business checking and savings accounts, business credit and debit cards, and business loans and lines of credit. Many also want access to certified checks, wire transfers and ACH payments.
   
   Fifty-six percent of CGI’s survey respondents want best-in-class products and services.3
   Quality online banking access, mobile deposit, and bill pay are givens. Could you also use automated accounts receivables and payables processing? Your employees might benefit from banking services like checking and savings accounts, credit and debit cards, and even 401k planning and investing.
   
   Aside from product capabilities, you’ll also want to consider how these products are delivered, how well they perform and any additional benefits they provide.
   
   • Ask for seamless integration. Is your provider’s solution compatible with your accounting, cash management and payment software? Seventy-five percent of corporations are reviewing bank payments solutions, while 66% are looking into cash management options.4 Integrated software that automates daily entries and helps with budgeting and payroll will save valuable time that you can use for other tasks. Scalable solutions enable your business to grow and adapt to changing needs.
   
   
   • Request real-time reporting. Tracking and accurate reporting are essential to managing cash flow. Fifty-eight percent of corporations believe a single view across all their accounts will improve their banking.5 Ensure that your commercial bank can deliver comprehensive real-time access and reporting.
   
   
   • Ensure secure data and access management. Fraud prevention is a top selection criterion for 60% of corporations.6 Your and your customers’ data should be securely managed. It’s good business and a compliance requirement from the Payment Card Industry Security Council. There are stiff penalties and fines for merchants and card data processors who fail to protect payment information. Ask your financial institution how it protects card and other financial data, as well as how they would respond in the event of a data breach.
   
   
   • Verify internal controls. Only authorized employees should have access to financial applications and data. Does your bank offer solutions with which to give specific employees permission to access accounts, transactions and reporting on a “need-to-know” basis?
   
   Keep your must-haves in mind but also consider future needs when evaluating a bank’s portfolio. Look for a partner that can grow with your business. For example, you may not need international banking services as a domestic business, but you will if you expand into foreign markets in a few years.



5. Test the digital banking experience.

   
   Digital tools are critical to conducting business. Dependable banking technology, such as online banking platforms, mobile apps and real-time payments can make money management more efficient and secure.
   
   Forty-two percent of commercial banking clients say digital servicing is important to them.7 Banks that fully understand business needs redesign or refine their online platforms for an enhanced user experience. Responsive design ensures you’ll get the same online experience no matter which device you use to access your accounts — the screen size and menu design automatically adjust. This allows you to perform daily cash management tasks from anywhere, using any device you choose.
   
   Your bank’s digital resources should be intuitive and easy to use. More than just a convenience, these qualities ensure employees, some of whom many not be financial or technology experts, can use the tools properly.



6. Ask for recommendations and referrals.

   
   Do your professional and industry colleagues work with commercial banks — or specific relationship managers — they love? Are there services or products others in your industry are using that you are missing? Ask for recommendations and referrals.
   
   Gathering background and client information can help you gauge a financial institution’s reputation. Look for learning opportunities with other businesses, particularly those in similar industries, to understand how well the bank might serve your own financial needs.



7. Review terms and conditions.

   
   As with any business partnership, thoroughly review the terms and conditions of banking agreements. You should understand fees, interest rates, repayment terms and other contractual details to avoid surprises that could have significant financial and legal ramifications.
   
   Sometimes you can negotiate terms and conditions. Successful negotiations often depend on a strong credit and business history, as well as a positive rapport with your relationship manager.

Choose a commercial banking partner that shares your vision.

During challenging times, your commercial bank must be on the same page as your business. “As interest rates rise, the cost of capital increases and ensuring clients are maximizing its use is key to responsible financial partnerships,” Walker says.

When considering commercial banks, collect as much data as possible, ensuring the institution aligns with your business plan, strategic approach and goals. This decision can impact your company's financial health for years to come, so choose carefully.

Contact a Synovus Commercial Banker or stop by one of our local branches for more details.