The ongoing financial crisis in the United States has led to tightening of lending standards, including those for small businesses. Many small businesses are being affected, but it doesn’t need to mean disaster for you.
One of the most important steps to weather the storm is to develop and maintain good relations with your business banker, according to Sovereign Bank marketing manager John Merrill. Much like a bank gaining confidence in a small business, confidence can be built in an experienced banker who has experienced various economic cycles.
A continuation of this theme is in the form of transparency. The more informed your banker is about your business and its plans, the better they can help. Bankers and small business people have the same objectives in mind, seeing your business succeed.
In addition to financing, a banker can help a business with something that is often overlooked, especially in good times. And that is retaining an adequate amount of net worth to weather tougher times. While credit is important, the banker can also offer advice on alternatives and tips on improving cash flow and financial condition.
However, before any plan is developed, a business and their banker must evaluate favorable and unfavorable conditions to provide sound solutions. Identifying hurdles to stability and profitability are vital to setting your small business on that course.
