Just about anybody who’s started a business has a horror story about a bank that gave them the runaround. The bank that wouldn’t return their calls. The bank that took months to approve (or decline) their loan application. And (my personal favorite) the bank that wouldn’t let them withdraw their own money.
Case in point: Last year, a client who tried to use her debit card to pay for her business plan was forced to suffer the indignity of having her card declined again and again even after she had transferred the funds into her account and the bank had confirmed that her funds were there. Finally, she threw up her hands and mailed us a check.
For all the millions of dollars that banks spend on advertising campaigns to persuade entrepreneurs to give them their business, the reality is that banks are large, bureaucratic institutions whose computerized databases have only a dim idea of who you are. (Except when it comes to your credit report. In that case, they know you all too well.) That’s why getting angry at a bank makes almost as much sense as throwing your remote against the wall because you can’t get cable.
So what’s the answer? In a word, relationships. Even though banks are huge and impersonal, they’re still run by human beings. (Last time I checked.) This means that if you, as a business owner, can find an actual person to help you with your banking needs, you’ve got a chance of breaking through. Yes, there is a human user interface behind those ATMs — you just need to find it.
Back in November 1995, a few days after my partner and I moved from Hollywood, Fla., to Brooklyn Heights, we walked down the street looking for a place to open our company’s bank account. There were three banks on the corner of Court and Montague. We chose Citibank because Citibank had the most ATMs in New York City.
Once inside, we were introduced to a bank officer named Denise. We told Denise that we wanted to open a checking account for our Web design firm, NetCreations, that we had started out of our house in Florida earlier that year. We handed her a $500 check to deposit. Denise welcomed us to the branch, helped us fill out the necessary forms and told us to call her if we ever needed anything else.
And we did. Two years after we opened our account, we ran into a cash crunch (it was August 1997 and our customers’ accounts payable clerks had apparently left for vacation) and had to start putting money back into the company just to make payroll. I called Denise, and she told me to bring her our accounts receivable report from QuickBooks. I ran down to the branch, and, three weeks later, we had a $100,000 credit line. Once I understood the power of debt financing to help us grow our business without selling shares to investors, I called Denise again. By the time our company went public in 1999, we had a credit line of $1 million and an equipment lease of another $1 million. And that original account that we opened with $500 in 1995 had close to $60 million running through it by 2000.
Interestingly, most banks that promote their services to small business owners make a big deal of their low interest rates. I don’t remember how much we paid for our credit line — it was something like Prime plus 1 percent. And that’s exactly my point. For me as a business owner, the rate that I paid to borrow the money was a lot less important than getting access to it in the first place. The things that I recall most vividly about my relationship with Citibank are the many times that Denise went above and beyond the call of duty to help us out of a jam. Whether it was the time that our bookkeeper filled out the wrong deposit slip and almost caused our payroll checks to bounce or the time that I decided to use Citibank’s online banking feature and didn’t realize that the funds would be debited from our account immediately, Denise was always there to save the day.
And that’s why, in the six years since leaving NetCreations, I have opened all my business and personal bank accounts with Denise (or with her assistant, Cassandra, now that Denise has moved up the ladder). Whether I’ve needed to deposit a third-party check or straighten out an international wire transfer from one of my tenants in The Village, I know that I can reach Denise on her cell phone 24 hours a day. That’s personal banking.
Now, I know what you’re thinking. That’s wonderful that it all worked out for Rosalind, but something like that is never going to happen for me. Not true. Over the years, I’ve spoken with many business owners who swear by their bankers as passionately as I swear by Denise. Not a single one of them has even mentioned the interest rate that they paid on their loan or their credit line. Instead, they’ve regaled me with stories of how their banker came through for them in a pinch.
This entry was posted on Tuesday, July 3rd, 2007 at 7:39 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.3 Responses to “Building Banking Relationships That Last”
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August 26th, 2007 at 6:36 pm
Problem is, this is no longer particularly valid. I had a company checking account for years, with one of the largest banks in the country. Branches all over the place and a giant web presence to boot. But, there weren’t any Denise’s. The only phone was to their big toll-free in the sky and web inquiries were attended to by someone in India. Now, if I got into the car and actually drove to the branch, then walked into the lobby, I could see real humans working there. But none of them knew me nor could care less about me. Besides, what was the point of trying? The people you saw there one day would be gone a few weeks later. They moved their people around constantly, and the turnover rate was and is horrendous. So what if they were friendly in the drive-thru? There aren’t any Denise’s anymore. Maybe in some little town somewhere. I don’t know.
October 18th, 2007 at 7:24 am
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November 1st, 2007 at 5:46 am
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