McBride for Business Blog

Will You Need Money in the Future? Why to Start Your Banker Relationship Now

July 11, 2017 // R. Shawn McBride // No Comments »

R. Shawn McBride recently spoke with Jeff Laceky, a banker in Dallas, about the importance of finding a banker sooner rather than later.

R. Shawn McBride: Hey, everyone, R. Shawn McBride here with you. Meeting with my friend Jeff Laceky and we’re gonna be talking some about establishing a relationship with a banker. A lot of times companies come to me and they need money, they want to get a capital infusion, they want to do something to grow and they don’t have those relationships there and it can really stall things out so we’re gonna talk some today about why that’s beneficial. Jeff, why don’t you give people a little background about who you are and what you’ve done and your experience?

Jeff: Well good morning Shawn, thank you, I appreciate the opportunity. I’m a 30 plus year banker here in Dallas, Texas and I have been in all phases of banking. From bank regulation, through retail and commercial lending, private wealth management, and my current focus is on helping commercial clients grow their business safely and intelligently. And without having that conversation with your banker about where you’re going and what you need to get there, he’s not going to be prepared to really support you in that effort. So it is critical that clients converse and communicate with their banker consistently so that he’s aware and can be prepared.

R. Shawn McBride: Yeah, and you’re talking about talking well in advance of the actual need, right? So you’re gonna want to develop the relationship over time, rather than wait until you have a financing need or emergency.

Jeff: That’s correct. Many times, entrepreneurs especially, are going to be businessmen or women who don’t really fit in that box of safety that banks prefer, so you have to be prepared and know your client, have those conversations with your credit partners inside the bank about why this is a safe investment for the bank to make and why the issues that may be outside the box are mitigated safely so that you can put the vehicle in place that really fits the need.

R. Shawn McBride: Right. And you’re really, you’re actually talking, the banker, in many cases, is almost your inside sales agent. I mean, they’ve got levels above them and you wanna build that relationship so the banker can then go back to the credit committee and say, I’ve known this company for this long, I’ve watched them progress, I think the CEO, you know, always returns my calls, they’re stable, and therefore I think we can possibly do a loan with them and this is why.

Jeff: Absolutely. Without, bankers these days have no loan authority on their own, so they have credit teams that they have to work within the bank to put these in place, especially as the needs get larger.

R. Shawn McBride: Yep.

Jeff: So yes, you’ve gotta, the banker is the advocate for the client inside the bank and details and history matter.

R. Shawn McBride: Exactly. So you absolutely want to be able to build that history. So when you’re meeting with clients now or potential clients now that you might be working with two, three, years from now, you’re building that relationship so that you can then tell that story to your committee and you can say this is why we really know them, this is why they’re a safer risk than what they look like on paper.

Jeff: That’s correct. And your client is expecting, because he’s built that relationship, the response is gonna be timely and accurate and doesn’t slow him down. The other piece to that is you’ve got, not only your credit committee inside your bank, you’ve got external regulators.

R. Shawn McBride: Yep.

Jeff: Most banks have at least three external regulators that question the reasoning behind investing depositors monies in loans outside the bank. And you’ve gotta have those covered and covered well.

R. Shawn McBride: So you have to have two layers of protection. You not only gotta get through the credit committee, but then you’re gonna have these outside influences that are gonna have to be justified too, so you really need to have a really good package of why this loan makes sense.

Jeff: Exactly. Yes.

R. Shawn McBride: So even if you trust the borrower, it’s about showing that trust to other people.

Jeff: That’s right. And your client, if you’ve built the relationship as a trusted advisor with that client, you’re gonna know the nuances and the intent that matter in today’s world and so my bank is a relationship based bank that has been around 150 years and we’ve got those stories, some of our borrowers are very unique and do really unique things.

R. Shawn McBride: Yep.

Jeff: And the bank that doesn’t have a history isn’t gonna touch those opportunities whereas we’ve understood them, been with them, and we’ve built a relationship.

R. Shawn McBride: Yeah, it’s almost a little counterintuitive here, right? You know you want to be talking to people well before they have the need. You’re not waiting until the moment of, oh my god I need a loan now, you want to have that history so that you walk in there. At what point is it a good time for somebody to kind of start that relationship with a banker?

Jeff: The day they go in, well, before they go into business, but as soon as you are a business and you have to have a bank to facilitate cash management.

R. Shawn McBride: Right.

Jeff: You need to have that relationship no matter what level your company is.

R. Shawn McBride: Yeah.

Jeff: And in some senses, that entrepreneur needs it even more because many times those guys are so thin on capital that the banker has to be aware of what the plan is and why they can do certain things.

R. Shawn McBride: Yeah and you know, I talk a lot when I do my 3 Laws of Empowerment speech, where I talk to groups, I talk about these ten-year visions. And knowing where you’re going and I think it’s fairly rare for a real business to have a ten-year vision, it isn’t going to involve some investment in itself, and a lot of times that means borrowing.

Jeff: Right. And capital, it’s all about capital, in many cases for growth. You cannot grow without capital. So, at certain phases of a business’ life, you’re gonna need more or less capital and you have to be prepared for those and it just takes planning because banks do bank risk.

R. Shawn McBride: Right.

Jeff: They don’t do capital risk, they don’t do equity risk, they do bank risk. And so you have to have the right phase in the right place.

R. Shawn McBride: Yep. And you and I are big about knowing people over a long period of time and really getting deep into their business. Tell me what a client relationship looks like when someone is working with someone like yourself? How does it normally progress, how often are you meeting with people, and how are you working through the process of knowing what’s going on in their business?

Jeff: Great question. And the answer is, it’s a balance of being connected to the client, being in front of the client, making sure the client knows you’re available. Many times an entrepreneur is so busy getting cash and building the business that he or she won’t take the time to have those conversations. But I always make it clear to my clients, I’m willing to invest as much time as they are willing to invest to make sure they’re safe. So, a heavy commercial client with a lot of reporting sees me on a quarterly basis at a minimum, got other clients that I see once a year because they just have no needs that are immediate.

R. Shawn McBride: Right.

Jeff: We’re long-range planning. And Shawn, I would say that at heart, bankers are risk managers.

R. Shawn McBride: Sure.

Jeff: They manage all day long, and so as a trusted advisor for a client, you need to be helping him or her manage the risk in the business and, as we both know, family dynamics overflow into a business every day.

R. Shawn McBride: Absolutely.

Jeff: The deeper you know clients life.

R. Shawn McBride: Yes.

Jeff: And how that family life impacts the business, you’re able to help give them points of risk to consider so that they can look at their other trusted advisors and get a consensus on the smartest plan.

R. Shawn McBride: Yeah. And there’s a lot to be said for that – this comprehensive planning. And that kind of goes to the early point we were talking about, building this relationship early with your banker because I know you from working with clients together. You do a pretty amazing job of getting in there and fully understanding their business, and you’re assessing risk points, and I’m guessing you’re helping take a lot of risk off the table that wouldn’t, you know so this client you meet early in the process, when they go to apply for a loan, many of those risks have already been dealt with, so they look a lot better to your credit committee.

Jeff: They do. And clients don’t have the training I have. They run a business. They know what they’re doing.

R. Shawn McBride: Yes.

Jeff: And so the experiences I’ve had over 30 years of where things have gone wrong for other clients and unexpected risk points have pop up that truly throw things off track.

R. Shawn McBride: Sure.

Jeff: The more we pick those early on, the less chance they have to derail a business plan. It just has to start early and be consistent and if your banker’s not calling you, you need to call your banker.

R. Shawn McBride: Yeah and I think that’s true of a lot of bankers, you know, you go, you open your business, you set up a bank account and you go to the banks to deposit stuff and you write checks and you don’t hear anything else.

Jeff: That’s right. Unless something goes wrong.

R. Shawn McBride: Yes.

Jeff: And it would be too late. So, it’s a really fulfilling process to be proactive with a client and make sure that they know you’re thinking about them not just when there’s a problem or not just when you need to hit some numbers.

R. Shawn McBride: Right. And just, so what types of things have you done for clients that have been outside the box? I mean, what have you done over the years that’s been unusual or different?

Jeff: There have been a few. And so, I have a client who’s a widow. And she was widowed early and was surprised about that and wasn’t prepared and so I was able to bring in some legal help and some practical home care help, because I knew these people and all the sudden all her solutions were in place with trusted persons or companies that were addressing those needs and she was just overwhelmed with.

R. Shawn McBride: Yeah.

Jeff: I had one lady who was a client who was . . . her home was broken into and she was pretty concerned about personal safety.

R. Shawn McBride: Yep.

Jeff: And I was able to help her with a home defense and personal safety expert who within a week had her completely feeling secure in her home and empowered to take care of herself.

R. Shawn McBride: Yeah.

Jeff: You know, if you’ve built a network of resources you can find an answer for anything.

R. Shawn McBride: Right, exactly. So, you know, you’re looking at more comprehensively and from a client benefit standpoint, you know, you’re, I know the way you work, you’re gonna be working to position people for a loan well before they need the loan so that when the time comes for that you’ll get them there.

Jeff: That’s correct. And we look at a balance sheet, personal and corporate, and we make sure that we’re doing the right things for that future need.

R. Shawn McBride: Yep.

Jeff: And, I explain to them why certain practices they may be having in their business might work against them in the future. At the end of the day, it’s his or her decision.

R. Shawn McBride: Sure.

Jeff: I just give them good advice.

R. Shawn McBride: Yes. It’s about information for the business owners. So, it’s a core point, I think, business owners need to think about their banking relationship very early. Most people don’t think about it until they kind of get out of the box, they’re growing, they’re doing something and they’re like oh, I need a loan to buy whatever they want to buy, and a lot of times that’s a little bit too late, it’s gonna be a much slower process.

Jeff: That’s correct and I would say that with, especially with the larger banks, many of the bankers don’t have the time that banker to really need to be that engaged, I think a client need to expect a banker to do more than just sit back and wait for a phone call.

R. Shawn McBride: Yes.

Jeff: And they need to reach out and let that banker know, here’s what I need and here’s what you should be doing.

R. Shawn McBride: Yep. Absolutely. I think that makes perfect sense. So, I just want to kind of get that message out to folks, get people thinking a little broader, think earlier. You know, I know you do a great service with your clients, Jeff. How do people get a hold of you if somebody’s listening to this and they’re saying yeah, I really want to start building a relationship with my banker?

Jeff: I appreciate that. My direct line is 214-515-4819. And I am at Frost Bank, in Dallas. At, that’ll find me. And I’m always willing to take a call and field questions and talk about what’s possible.

R. Shawn McBride: Yeah, definitely. So if you’re there and you’re listening to Jeff, he’s really relationship oriented, that’s something you need to do. Feel free to reach out, Jeff, I know he will talk to you and give you some ideas and really start pointing you in the right direction for the long-term. It can be very valuable for what you’re doing. So, feel free to reach out. I hope that expanded peoples thinking a little bit, think a little more about relationship oriented and what you can do. If you have specific questions on banking and banking process, let me know. We’d love to do some future content. And I can probably get Jeff back on here again. Or we’ll do something else. So, R. Shawn McBride signing off. I will talk with you very soon.

Make sure you download our free checklist to assess your business.  

This posting is intended to be a tool to familiarize readers with some of the issues discussed herein.  This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique.  Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. jenny Rollo.


About the Author

R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or (214) 418-0258.


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