Life is too short, and business too complex, to put up with a frustrating banking experience. As a business grows and your financial expertise expands, or rates change at your current business bank, sometimes it’s just time to move on.
Is it time for a break-up? Nothing personal, it’s just good business.
You’ve outgrown limited services. Common to entrepreneurs who open their first business accounts at a primarily consumer bank, unaware that a bank’s area of specialty deeply impacts everything from scope of products to rates, fees and customer service, a rapidly growing business can quickly bump into roadblocks when its bank can’t keep up. If you find yourself constantly pitched the product du jour, instead of banking products that move your business forward, it might be time to move on.
You feel like a number. If you don’t have a dedicated banker to work with, it also might be time for a change. Business banking is significantly more complex than personal banking, and the relationship with your banker should not be based on email exchanges. It’s important to have a banker who’s taken the time to physically visit your business to see it first-hand, and communicates often enough to understand your cash flow cycles, financial goals and long-term vision. How else can they suggest the right mix of banking products?
You’re thinking about a major loan. Savvy business owners also consider changing banks when they’re ready to take on major debt to grow their business, since having their business checking account at the same bank may significantly lower their interest rate or fees, and make it easier to automate payments. Shopping around for a business loan can be very enlightening, and make the need for a change obvious.
Learn how to pick the right loan in this recent blog post.
When it comes to loans, having the right banking relationship in place matters. It’s also a great idea to open the business checking account before applying for the loan, to establish a solid banking history and gain the banker’s confidence in your ability to pay off a loan.
You’re quoted ridiculous rates, or have a looming rate increase you’re unhappy with. While a bank must follow federal limitations and governance on its activities, non-bank lenders don’t have the same protections in place for the borrower. If you feel rates are not competitive, it might be time to change banks. There is a wide variety of factors that influence a bank’s rates and fees, and the same loan at another bank can be significantly different. It’s also true that one banks’ “no” is not the answer for every bank. If you are declined for a loan, have a balloon payment coming due that needs refinancing, or have a rate increase pending that you’re unhappy with, it might be time for a change.
Bad customer service drives you insane. There’s no reason to ever put up with poor customer service, a bank you don’t trust, or a sloppy relationship with a banker who clearly isn’t invested in your business’s success. If you’re frustrated, it’s time to move on. There is too much local banker expertise and banking relationship options to remain in a stressful relationship. If your business bank consistently lets you down, move on without hesitation.
When should you change banks?
Timing for a major change is completely up to you, of course, but might we suggest making the change at the end of the year? It makes a nice clean break for tax and record-keeping purposes.
If you don’t wait to the end of the year, you might consider waiting until the end of the month or quarter.
Ready to change banks and wondering about the advantages of a community bank? Schedule an appointment today, and we’ll be happy to bend your ear. We’re here to help you grow.