by Jeff Thill

Banking is a relationship business – at least, it should be. As such, manufacturers often decide to open business accounts with the same bank they use for their personal accounts.

While one’s own bank may be more supportive of business account needs given your personal financial track record, it never hurts to compare products and services before selecting a business bank. This can be a particularly beneficial move if a manufacturer is considering a future expansion or a significant equipment purchase.

In any event, expectations for personal accounts differ greatly from the types of services and assistance businesses require. To find the right fit, manufacturers should first identify the types of services they need and determine what they value in a long-term business banking relationship.

Here are 10 qualities to consider when evaluating a potential banking partner. Strive to find a combination of traits that will best serve your business needs.

1. Pricing. Price alone should never be your sole determinant, but it’s still an important part of the equation. Be sure to compare a bank’s entire fee structure—annual renewal fees, fees associated with demand deposit accounts and credit cards, and any service charges, both upfront and hidden—versus simply reviewing interest rates.
   
   
2. Size. Large banks may offer bigger credit arsenals and expertise with wider varieties of loans, but small banks may provide faster decisions and can be more accessible. Determine what advantages size offers and decide what’s most important to your business. Compare both big and small institutions.
   
   
3. Reputation. Does the bank have a good reputation with other manufacturing customers? Get referrals from your network, including accountants, attorneys, trade associations, vendors, and especially business peers. Most business owners will know who’s a good partner and who isn’t.
   
   
4. Location. If you expect to make frequent cash transactions, easy access to a local branch is important. Outside of the obvious convenience factor, there may be additional advantages to working with a local bank. Often a local bank’s decision makers are in-house, as opposed to those at a larger, national chain. On the other hand, if your business is national or global, you may prefer a bank with offices in your key markets.
   
   
5. Compatibility. Some banks specialize in small business loans, others in real estate lending. Find the bank that specializes in your industry and has a history with your service needs. It’s equally important to feel comfortable with your banking representative and with the bank’s culture as a whole. You need a contact you can trust, but you also need good relationships with others inside the bank, should staff changes occur.
   
   
6. Service. Beyond a friendly front office and an efficient back office, you want a banker who will visit your business regularly and take the time to learn more about your operations and ambitions. If you’re a small business, ask the bank whether it has a dedicated small-business team.
   
   
7. Consultation. In a trusting, long-term banking relationship, you should expect to receive solid business advice from your banker, without over-involvement or attempts to manage your business.
   
   
8. Technology. Many tools can simplify transactions, enhance convenience, and save time, such as online banking and electronic deposits. Determine what technology features the bank offers and whether it’s investing to stay current with technology trends.
   
   
9. Alignment. Your company’s strategy should be aligned with the bank’s capabilities. For example, if mergers and acquisitions are in your future, look for a bank with M&A experience.
   
   
10. Growth. What’s the bank’s capacity for growth? Can it keep pace with your own growth needs? If you choose a bank you’ll quickly outgrow, it may need to outsource part of your loan, thereby losing some of the control. Instead, choose a bank that can help take you to your next level of growth.

Manufacturers should make the most of their banking relationships. If you aren’t seeing the qualities that are important to you in your current bank, you may want to consider looking for a new partner.

Jeff Thill is a Wipfli partner serving manufacturing and wholesale entities ranging in size from large, widely owned companies to smaller, family-owned businesses. To learn more about employee retention, please contact Jeff at our St. Paul office at 651.766.2862, or e-mail him at jthill@wipfli.com.