The pandemic has certainly changed our daily lives, from the way we socialize with each other to our new work-from-home normal. However, one thing that shouldn’t change is the strong working relationship you have with your bank. Now more than ever, it’s important for businesses to be prepared for anything—especially when it comes to finances. Here are a few key things to consider when evaluating your company’s relationship with your bank to ensure you are getting the greatest benefit from its services when you need it most.
- Engage in proactive communication. Reach out to your banker and provide updates so they have current and complete information about your business operations.
- Provide solutions. Be prepared to demonstrate a well-thought-out plan that you think will help correct underlying problems.
- Know your company’s liquidity. Understand your cash flow and how long it will support your company during any given time.
- Understand your credit access. Know your company’s ability to access lines of credit. Keep in mind that performance changes can sometimes impact your ability to access that line of credit.
- Communicate with your bank. Talk with your banker on a regular basis and make them feel like they are a part of the company.
- Have an action plan. Create a realistic, actionable plan you can implement during tough times.
- Try to maintain discipline in the good times. Don’t take on too much leverage, even in the good times.
- Know your bank’s pandemic plans. Knowing your bank has a pandemic plan in place instills confidence and can serve as a resource as you develop your own action plans.
- Have confidence in and understanding of your bank. You should have confidence that your bank is running its balance sheet in a way that helps protect your business.
- Have a relationship with your bank; not just one banker. Get to know your banker and whoever your capital providers are—don’t outsource your company’s banking relationship to your CFO.
To learn more about how to prepare your company for uncertain times, check out this recent article in DCEO Magazine‡.
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