Follow Dallas Linkedin
Email Dallas Email
Financial
Nov 9, 2015

Is The Bank With You Or Against You?

Sponsored Content provided by Dallas Romanowski - Managing Partner, Cornerstone Business Advisors

Many business owners have mixed feelings about their banks and their banking representatives. They are unsure about whether they can be completely honest about their business without a negative impact on the bank relationship.

On a daily basis, you do not spend much time thinking about your banking relationship. When the time comes to tell the bank you’re planning to exit your business, or when you need money, however, you may experience feelings ranging from mild anxiety to outright dread.

Why? We’ve been conditioned to believe that bankers say “no” far more often than they say yes. That may or may not be true, but bankers make money by saying yes. When they turn down a lending opportunity, they just don't lose money.

Like all other businesses, banks are eager to continue mutually beneficial relationships. If the sale or transfer of your business is unlikely to disturb that relationship, your banker is (or should be) vested in helping you execute that transfer. It should come as no surprise that smart banks value the relationship even if you are no longer part of it.

How to Answer the Question

Let’s look at two sale situations our firm has been involved in to clarify our point.

The first was a sale to a third party in which the entire purchase price was paid in cash at closing. In this scenario, we helped our client find a bank that was willing to finance the purchase at the sales price the client wanted. This transaction was supported by an SBA 10-year loan at a fixed-interest rate of 5.375 percent. The business sold for $2.4 million and 90 percent of the value was in goodwill.

In the second scenario, we have a client who decided to purchase shares from his partner so he could transfer ownership to his family. The owner’s family works in the business and the son wants to continue running the company when his father retires next year. The family used an SBA loan along with partner financing to purchase the shares from the business partner. The bank’s capital made the long-term estate plan work. Cornerstone Business Advisors also helped the client develop a governance strategy to minimize potential family disputes later on.

Again, the banks want your business and will help you make sure your plan and your buyer meet certain standards. 

Where to Go Next?

Don’t be intimidated by the bank. Let the team at Cornerstone Business Advisors work with you to identify all of the steps that will help you secure bank financing successfully and without stress or anxiety. Your banker is ultimately a member of your team of trusted advisers, when the relationship is working well.

For more information about the role of bank financing in your plans for the future, and what the bank will require or request, contact us. We are ready to help you today.

The Cornerstone team includes former C-level executives, successful entrepreneurs and advisers who offer unmatched experience in delivering advanced, custom-tailored, results-oriented solutions for business leaders. As a member of the Business Enterprise Institute (BEI), Cornerstone is an authorized distributor of BEI’s content and Exit Planning Tools.  We developed the Performance Culture System™ to help clients implement best practices and drive high performance throughout their organization. For more information, visit www.launchgrowexit.com, call 910-681-1420, or email [email protected].  
 

Other Posts from Dallas Romanowski

Bizjournalblockad
Ico insights

INSIGHTS

SPONSORS' CONTENT
Cd

Don't Forget the "B"

Hoop Morgan - The Forté Institute, LLC
Adamshay 300x300

Will ChatGPT Do My Taxes Next Year?

Adam Shay - Red Bike Advisors
Burrus rob headshot 300x300

A Summer with Partners/Friends Across the Pond

Robert Burrus - Cameron School of Business - UNC-Wilmington

Trending News

'Landing That Big Fish': With $19M Land Purchase, Brunswick Officials Aim To Lure Employers

Emma Dill - Sep 19, 2023

A Local Landmark's Restoration Boosted By National Grant

Cece Nunn - Sep 18, 2023

CFCC Expands Apprenticeship Programs, Builds Employer Support Network

Jenny Callison - Sep 18, 2023

Green Named COO Of Boys & Girls Clubs Of Southeastern NC

Staff Reports - Sep 19, 2023

Coburn Assigned To Sales Of New Homes At Wyndwater

Staff Reports - Sep 19, 2023

In The Current Issue

MADE Winners: Functional Product Category

Skin care products, bean bags and lumber function at the top of their game...


Trail Clear For Sunset Beach Development

That project involves making a cascade of improvements to Sea Trail Plantation, a 2,000-acre golf and country club development located near...


MADE Winner: Supporter Business Category

HR company works to provide other companies with human resources solutions....

Book On Business

The 2023 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2023 Power Breakfast: Major Developments