Very few bankers will admit the truth, but Bill McLaurin knows what people really think of them. "Bankers tend to be dour curmudgeons," says McLaurin, chief executive of the Bank of Coronado. "Perhaps it’s because we have to say 'no' so much to people’s great ideas. But we’re not venture capitalists. It’s not our own money we’re putting at risk." Letting a bank's reputation come between a company and a bank could be a critical misstep, especially in the case of an emerging business. Few choices are as important as selecting a banker for a new business. Along with supplying the most essential element a new business needs — cash — banks too offer many key services. Among them are payroll services, retirement funds, checking, loans and insurance. And then there's the incalculable: the breadth of the banker's experience. "There are a lot of intangibles that we can bring to the table," says Jeff Huhn, a senior vice president with Silicon Valley Bank. "For instance, we can take care of many of the details so a new business owner can focus on the company." Managing money often is a weak point in an entrepreneur's makeup. It’s a banker's strength and can be the key to avoiding a total pitfall. In emerging businesses, it is becoming increasingly common to have a banker as part of the strategic team. Doing so can increase a company’s chance for success in several ways. Planning: "A banker is someone who can provide direction that a new business (owner) doesn’t have time to think about," says Tony DiVita, director of sales and service for Scripps Bank. "A banker can help with a company’s business plan and play a crucial role in how to reach those goals, whether they be short or long term." Proper planning also makes for a stronger young company. "If a business has the right foundation it has a better chance of succeeding," says DiVita. "That takes a lot of planning. That's where a banking adviser can help — by thinking of things they haven't thought of yet." Advice: "The plan is to maximize assets and utilize them well," says Beverly Stewart, vice president of Business Banking for Neighborhood National Bank. "As the business expands, we know of different programs they can access at different points in their growth." Networking: People in financial institutions know other professionals in the field. And often banks will match up their clients with venture capitalists, investors or even recommend CFOs and controllers. After The Decision Once a banking counselor is selected, there's still much an emerging business can do to make the partnership a profitable one. "You have to have a banker that takes the time to listen," advises McLaurin. "They need to know where you want to go to get you there." Responsiveness also is a key element in the relationship. "Speed is important," says Huhn. "It might be as small as a check clearing, but it has to be done much more immediately when a business is starting out." Sometimes knowing what a bank can’t do is as important as what it can provide. Even then, this partnership can be beneficial. "There are times when we can’t loan a business money," says Stewart. "But we try to work with them to manage the business and often they emerge stronger." In these cases the advice of a banking counselor can be worth more than any stock options or cash payment. "We look at it as being partners in their business," says DiVita. "We’re here to make their business successful." So why would a busy, money-oriented bank take the time to hand-hold a new company through a time-consuming myriad of financial decisions? Part of it is the excitement of working with an emerging business. "I can appreciate that this person is putting a lot on the line and may create the next great technology that may change the world," says Huhn. "They could be the next Bill Gates. That's exciting. Of course, in the process of lending money, we also make money. And as they grow, so does the amount of money we make." Often that fledgling business' needs will mushroom as it grows. The bankers hope the principals remember who held their hand through the formative years. "It’s like planting a tree," says McLaurin. "You have to nurture it more in the beginning. But as the tree matures, it provides more shade. Like children, you take pride in their success. I like going down the street and pointing out this business and that business and saying 'I helped get it started.'"

Home | Features | Info | Cover Story | About Us | Back Issues | Search