As a professional in the manufacturing sector, you undoubtedly juggle numerous responsibilities on a daily basis. Among these, maintaining a strong banking relationship often falls by the wayside. However, a solid partnership with your financial institution can be crucial to your business’s growth and stability.
Let’s explore why and how you should regularly assess your relationship with your lender and how your manufacturing community can help.
Timing Is Everything
Many business owners don’t start looking into their bank until they need a loan or face a financial challenge. However, this approach can put you at a disadvantage.
The best time to evaluate your banking information is not when you need it.
Instead of waiting for a crisis, evaluate your banking relationship regularly as part of your business routine. Set up a checklist of important factors to review periodically. This proactive approach ensures you’re always prepared for opportunities and challenges that may arise.
What to Look for in a Banking Partner
Open Communication
A good relationship with your lender extends far beyond basic transactions. Ask yourself…
- Do you have a dedicated point of contact at your bank?
- Can you easily reach someone who understands your business when needed?
- Does your banker proactively offer insights or solutions for your business?
If you answered yes to any of these questions, you might consider developing a deeper relationship with your lender – or seeking out a new banking partner that better serves you.
Industry Understanding
A bank that truly understands the manufacturing sector is invaluable. An ideal banking partner should comprehend the ebbs and flows of small to medium-sized manufacturing companies, including:
- Seasonal fluctuations in cash flow
- The impact of equipment investments on your balance sheet
- The unique challenges and opportunities in the manufacturing sector
Competitive Offerings
Look for banks that offer competitive rates and services tailored to our industry. For instance, U.S. Bank, one of NTMA’s national associate partners, specializes in machine financing for small to medium-sized manufacturers.
How to Build a Strong Relationship with Your Bank
Educate Them
The more your banker understands your business and the manufacturing industry at large, the better they can serve you. Consider sharing industry-specific information, such as NTMA’s financial surveys and benchmarking reports, with your banker. These reports:
- Compare your business to other manufacturing companies in your region and size category
- Provide analysis that helps banks understand your business in context
- Can give you a competitive advantage when seeking loans or other financial services
This data can provide valuable context about the unique financial aspects of manufacturing businesses.
Set Regular Meetings
Consider scheduling regular meetings with your banker, even if it’s just a quarterly lunch. These meetings allow you to:
- Keep your banker updated on your business’s progress and challenges
- Learn about new financial services that could benefit your company
- Establish and maintain a personal relationship that can be invaluable when you need support
Shopping Around for a New Lender? Leverage Your Manufacturing Network
If you’re evaluating whether or not your bank is the right fit for you, don’t hesitate to reach out to fellow manufacturers on NTMA Connect. This platform allows you to:
- Learn from peers about their banking relationships
- Get recommendations for banks that understand manufacturing
- Share your own experiences to help others in the community
Remember, a bank that understands this complex, ever-changing industry and takes the time to know your business can be a powerful ally in your growth journey. Leverage NTMA’s resources, network with fellow manufacturers, and prioritize banking relationships. Your future self will thank you when opportunities or challenges arise, and you have a strong financial partner ready to support you.
If you aren’t an NTMA member yet, what are you waiting for? Join today to access countless resources that can guide your business to success.
