What small businesses should expect from their financial institution

If you’re a small business owner or entrepreneur, look for these five things from your banking partner.

As a small business owner, what do you expect from your financial institution? Mobile banking? Access to credit? Affordable accounts? According to ACU’s Community Financial Centre Director, Nigel Mohammed, this is the very least you should expect.

A small business’s relationship with its financial institution should be like a partnership,” says Nigel. “Their credit union or bank should be looking at ways to help their customer’s business grow, and there are plenty of things they can do to make that happen.”

Nigel Mohammed, Director, Community Financial Centre

Here are Nigel’s tips on the help that small businesses should expect from their financial institutions.

1. Expect a dedicated Account Manager committed to your business’s success

A dedicated Account Manager, such as those at the Community Financial Centre, will get to know your business, understand your key challenges and be able to offer advice and support.

Your Account Manager should encourage honest, open communication,” says Nigel. “This will lead to more relevant and valuable advice for your business.”

Flexibility is another key component. “Your Account Manager should be able to help you to navigate the peaks and valleys of your business by ensuring access to appropriate banking solutions — be it financing, cash management, commercial accounts, et cetera,” he continues. “If your business hits a quiet period, your financial institution should be able to offer flexible arrangements, such as deferring principal payments on a loan, until your income bounces back.”

Your Account Manager should also offer customized accounts that are designed according to your specific needs. For businesses, this includes accounts that can take into consideration seasonal balance fluctuations, volume of transactions, service fees and interest earned. Convenient access to these accounts via digital services should also be considered, recognizing different levels of authority may be required for certain transactions — for example, when it comes to making transfers.

What small businesses should expect from their financial institution

2. Expect locally-made decisions with local understanding

Having a financial institution that can make decisions locally, while understanding the local community, is essential for small businesses. In particular, this local decision-making tends to be faster and more likely to take into consideration the unique challenges your business faces in the region.

An Account Manager who is able to make decisions using local knowledge and without having to defer to another city, or even province, is far more likely to be able to respond with a decision that, in turn, responds to your specific business needs,” says Nigel.

3. Expect flexible loan offers based on your business’s performance

“Too many lenders make loan decisions based on a business owner’s personal net worth and personal credit score,” Nigel reveals.

Although this approach may provide the borrower with a quicker automated decision, entrepreneurs may not be getting expert advice necessary to inform important decisions affecting the long-term viability of their businesses. Borrowers starting or expanding their businesses with limited personal assets or lower credit rating may also find it difficult to qualify for financing under this approach.

Effective small business lending should fundamentally be looking at the historical or forecasted financial statements of the business — and not primarily on the personal wealth and credit history of the individual.”

Both the lender and borrower together should consider factors such as:

  • How much is the appropriate level of debt to undertake?
  • Is an operating line of credit better than a term loan?
  • Why do I need to focus on profit margins and not just sales?

“You need a lender who will make the informed decisions that help you to get the right loan for your business and ultimately help you take it to the next level.”


Read: Follow these ‘5 Cs’ when applying for a business loan

4. Expect a proactive, long-term partnership

Your Account Manager should always be proactively looking at ways to improve the banking side of your business. For example, they should recommend switching to a new type of business account if you have grown out of your old one. Or if your business has surplus cash, they should suggest ways to invest that money for a better return.

In addition, your Account Manager should have a sufficient understanding of your business so that they can recommend resources that can make you more efficient, such as outsourced payroll or cash management services.

Having a financial institution with a network of community and government resources is also extremely valuable. For example, being able to access loan guarantee programs or additional experts who can provide advice to help you through entrepreneurial challenges can make a big difference. ACU works closely with these types of community and government partners.

We often refer our business members to resources such as the World Trade Centre, SEED Winnipeg and Women’s Enterprise Centre in Winnipeg,” explains Nigel. “These organizations have been established specifically to support entrepreneurs with market research, mentorship, technical advice, expertise and help in creating a business plan.”

5. Expect to get the best banking for your business

If your financial institution doesn’t provide you with all of the services listed here, it might be time to switch to one that does. Your Account Manager should feel like a trusted extension of your team, and be able to guide you through your business banking in a way that works for you.

It can be intimidating to switch financial institutions or set up new accounts. But the right partner who understands your business challenges and timelines should also help you through that process. In the end, you will feel more in control of your business financial health.

At ACU, our Community Financial Centre is committed to helping our members build their business. We form partnerships and provide the expertise, advice and banking solutions that help them thrive.

Call or email to set up an appointment to speak with an ACU Community Account Manager who can discuss your business financial health — and start getting more from your business banking.

Phone Direct: 204-958-8588
Toll-Free: 1-877-958-8588
Email: cu@acu.ca

About Heather Sadowy

Former Community Account Manager with ACU's Community Financial Centre, Heather Sadowy managed a diverse portfolio of small business and non-profit members in a variety of industries.

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