What Banker Doesn’t Just Want My Money?

Small businesses face a lot of challenges, not the least of which, as we’ve discussed many times in these emails, are those related to working capital.  Is your business growing but income isn’t keeping up?  Are you having to increase inventory ahead of an anticipated expansion but don’t have sales results to support it yet?  Did you complete your best-ever quarter or year but now lack funds to reward your team?  Where might you turn for help resolving these problems, especially if your business isn’t big enough to attract a high-priced chief financial officer?

My friend Dana Bondy, Senior Vice President of Commercial Banking at Sunflower Bank, is happy to help with these challenges and the many other challenges his clients face each day.  You might be thinking that you are already borrowing to meet these challenges and won’t benefit from meeting another banker, but you may be surprised to learn about the many other ways Dana and his team can rescue you.

Many of Dana’s clients first engaged with him because their business was growing.  Revenue was up, but so were expenses.  Inventory may have been growing, payments to suppliers and other vendors were probably growing, and increasing sales hadn’t created cash reserves to cover the business’ growing needs.  Dana pointed out that the solution for most of these clients wasn’t simply increasing their lines of credit.  While increased borrowing may have been needed, more borrowing may also have added to the need for cash to service the loan.  In most cases, the tools Dana and his team helped the owners learn to use included those that would get them paid more quickly and allow them to hang on to cash longer.  Dana shared that most of these clients didn’t have the staffing or the infrastructure to implement these tools on their own or, in the case of newer businesses, didn’t have the knowledge or experience to find and implement these tools on their own.

Dana starts new relationships understanding that each client’s situation is different, so he always asks for the new client’s business projections and balance sheet.  His review of the financials and projections helps him understand the client’s cash needs and identify timing gaps between sources and uses of cash.  He explained, “You can learn so much about a company by reading their balance sheet.”

Once Dana has helped a client achieve stability, they can more easily work together when the unexpected happens.  In one instance, Dana’s seasonal contractor client was faced with taking a large, unexpected, and unanticipated charge-off.  The charge-off almost immediately changed the client’s year-end projections from healthy profits to losses.  By consulting with the owner and helping him implement some tools that Sunflower Bank offers, Dana helped the client smooth-out cash need variations from period to period and mitigate the hardship of earnings graphs that resembled roller coaster tracks.

In another case where life dealt the client a surprise, Dana helped him navigate the choppy waters of divorce.  Dana helped the client leverage non-business assets and accumulate the funds needed to buy the former spouse’s share of their business.  “It took everything,” Dana told us.  “Despite a couple of lean years, distinctive because he was driving only his business and his motorcycle,” Dana shared, “we patiently watched him repay debts and grow the business.”  After only five years, the client had paid off all the debt, maintained a nearly unused line of credit, and amassed a retirement nest-egg.

From straight forward conventional loans and lines of credit to complicated transactions lending to such borrowers as ESOPs, Dana and his team are ready to help their clients structure and navigate transactions, operate within the restrictions of their loan covenants, and grow their business.  “Big banks can offer cheap loans, but community banks are focused on small and middle-market businesses that the big banks overlook,” Dana says.  “We’re more ‘hands-on’ and have front-line experience because of how our model works.”  He confided, “If I’m doing my job right, I’m a trusted advisor.”  He also shared that, when he started his banking career, his job title was “loan officer,” “ . . . but the banking industry and technology have changed so much that now it’s not just about providing loans – it’s about cash management tools and the many ways a bank can support growth.”

A differentiator that puts Dana above the crowd is his drive to provide value in every relationship.  His favorite clients, the owners of closely held businesses, gained his favor because he can make a big difference for the client and the business.  “When I get an RFP,” he says, “that’s not as interesting because chances are that they don’t really need me.”  The projects he especially likes are the ones that involve a personal relationship and an opportunity to add value, rather than just offering quickest loan at the lowest price.

Dana especially enjoys projects that involve business succession.  He shared a story about a cold call he made early in his career.  He simply dropped in to the business and became friends with the owner.  Years later, based on their relationship, the owner had confidence in Dana and asked him to work with a business broker to arrange financing for a sale of the business to a key employee.  Not only was the sale and its attendant financing successful, but Dana’s continued involvement helped the new owner take the company to the next level.  Dana shared that these two challenges, the acquisition financing and the explosive growth, are among his favorites to tackle and were both present in this single transaction.

I asked Dana, “What would you look for if you were looking for your own banker?”  Dana answered, “I would look for someone who asks a lot of questions.  It’s so important for a banker to have a natural curiosity.”  Dana explained that he places high priority on knowing the client and “what makes them tick, what works and doesn’t work, and the challenges, opportunities, and obstacles they face.”  He added, “Follow-up is also vitally important.  It’s one thing to ask questions, but it’s on the banker to follow-up and add value with answers and recommendations based on their knowledge and experience.”  He also recommends exploring the banker’s relationship with the bank’s credit team.  Dana concluded, “A banker who enjoys a good relationship with the underwriters will be familiar with their expectations and will have a good idea of whether a loan will be approved before they even start writing the loan application. By working together, client and banker, the right borrowing structure is fleshed out.  My clients have invested in me and educated me over the years, and that is how I am able to help them.”

Dana’s ideal client is one who communicates regularly, values Dana’s input, and is forthcoming with both good news and bad news.  One of his best clients, he says, was a former banker who would always start with the bad news – often before it happened.  “This allowed me to prepare for and make a plan to navigate whatever the client saw on the horizon,” Dana confided.  “That client’s habit of openly sharing made me look really good,” he says.

What does Dana recommend as a starting point for self-help?  “Go back to communication.  It’s important to understand the value of your banking relationship.”  Sunflower Bank offers competitive rates, Dana commented before admitting he is always surprised when a person elevates rates as their main banking criteria.  “With a banker, you’re getting a consultant along with the loan, so it’s important to make sure you trust them and you’re getting good advice.”  Dana stressed the importance of banking with someone you trust.  “They’re a member of your finance department.  You don’t have to settle.  Find someone who is super sharp or who has some gray hair (meaning they’re experienced).”  These qualities will allow the person to be both an excellent banker and a great relationship manager.

If you’d like to learn more or get to know Dana better, please reach out to me.  I’d be honored to connect you.