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TAB Chicago CEO Forum - June 10, 2011
Wrap Up
FINANCING BUSINESS GROWTH
The Secret to Financing Growth in Today’s Economy
TAB Chicago Members and guests gathered on Friday, June 10th for the first “CEO Forum” of 2011. This is the 12th year that TAB Chicago has offered these educational forums for TAB Members, typically held three times per year. The topic was “Financing Business Growth - What You and Your Bank Need to Know About Each Other”. Three experienced middle-market bankers from The Private Bank shared their advice on what banks look for, as well as what you should look for in your bank.
Current state of the market:
- Credit standards remain high
- Good banks are competing for the most “bankable” companies
- “Floor” rates on loans are becoming less common
- Bank staffing is tight – it may take longer to get things done – plan accordingly
The key things your banker wants from you are:
- Honesty and proactive communications – acknowledge any problems and have a plan
- Financial statements (P&L, Balance Sheet) as well as AR aging and cash flow forecast
- Personal financial statement if personal guarantees are involved
- Credit and Borrowing/Payment History
- Business/Financial plans (1-3 year)
- Strong management team and succession/contingency plan
- Professional advisers (accountant, attorney)
- A relationship (multiple accounts – more than just a transaction)
How to be an informed customer – what to know/do about your bank/banker:
- Make sure they are strong financially
(lots of info at http://www.fdic.gov/bank/statistical/)
- What level can you deal with (the higher the better)?
- Have more than one banking relationship, or a backup – things can happen to the bank that will affect you
- Put discussions with bankers in writing/email – have a paper trail for when people change
- If your company performs well, restrictive covenants should adjust
Becoming More Bankable
Financing Business Growth Presentation
Now that you understand our approach, philosophy and the results you can expect from working with us, it’s time to find out more about the Services and Tools we offer. |
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