Beyond Stashing Your Cash

When it comes to making big decisions, private middle-market companies often do not have the built-in advice and decision-making structure of a board of directors, but outside advisers are available to help company executives mold strategic plans. Accountants, lawyers and even bankers can form a sounding board for the CEO and offer perspectives on best practices for strategic plans, acquisitions, expansions and more. Unsure where to start? Try your financial institution – a built-in, trusted adviser that typically offers free consultation to companies on a variety of issues.

Here are a few reasons to begin treating your banker like a company consultant:

• Your growth path will be clearer. Most executives head to the bank once they have determined that a loan, line of credit or other financing is needed to keep the company on track or expand. Simply reacting to a perceived need is not the same as filling a need, however. Including your banker in important conversations on strategic plans or hopes and dreams can help him or her identify any red flags or hurdles and implement steps to fill any gaps well before a loan or credit application is submitted. This helps ensure that you receive input from the bank and have a better understanding of financing options and terms available instead of merely hoping they will fulfill a request for funds.

• They can offer the “family plan.” Full-service banks, unlike a private equity fund or online lender, frequently offer business clients additional valuable resources and integrated services such as treasury management, which can include ACH transfers, wires, merchant services, and customer billing and presentment platforms. Many financial institutions also offer relationship benefits on personal banking products for a business owner. For example, institutions like TD Bank can make connections for an executive with a wealth management team that can consult on investment strategies for the company owner and business, if applicable, or offer relationship discounts on mortgages.

• Staying on track becomes routine. Middle-market companies often operate at warp speed trying to fulfill orders, turn over invoices and cope with staffing demands, but a successful business of any size needs to pause regularly and assess. Visiting your banker quarterly is the most efficient way to ensure business is on track with goals, but even a semi-annual check-in can help uncover potential obstacles to success and provide insight into where the company needs to strategically invest.

• Educational resources abound. A growing company needs tools and information to help protect its assets and implement best practices. Many financial institutions offer free seminars, webinars, whitepapers and more designed to educate on everything from efficiencies and strategies in accounts payable operations to cybersecurity. They also can provide key introductions or referrals to skilled professionals such as attorneys and third-party service providers like customer payment aggregators. Building a relationship with your banker helps ensure you remain informed about upcoming sessions and provides learnings without hefty conference registration fees.

Treating your bank like a company stakeholder instead of a service provider can provide your management team a boost while benefiting business operations. With a financial institution as a partner, middle-market companies are better positioned for success and to wisely manage future financial windfalls.