How to Work With Your Bank When Times Are Tough - BusinessTown

How to Work With Your Bank at Tough Times

As long as you have been with a bank for a couple of years and have given the bank some advance warning regarding a few upcoming late payments, it will probably still want to keep your business. If you can present a good case for your company’s future, with accompanying numbers, the bank may even extend your credit limit to assist you during your cash crunch.

However, if you are going to be missing a lot of payments and can’t predict when you will be able to catch up, the bank will be much more interested in recovering its capital than retaining your patronage. In this case, the bank will not be interested in extending your credit limit, no matter how much you may need the cash.

The Bank Wants to Feel Confident about You and Your Business

On the other hand, if a bank feels it has a reasonable chance of recouping all or a significant portion of its loan at some point in the future, it probably won’t attempt to foreclose on your assets.

Even though a bank may have carefully considered the existence of solid collateral, such as real estate or equipment, in lending you money, very few banks are eager to press a customer into foreclosure to offset loan losses. Banks seldom realize market value when they auction off foreclosed property or equipment. Foreclosure proceedings cost time, money, and community goodwill.

Always keep your bank appraised of any major financial changes in your company, even when they are negative. And, in this case, offer the bank a realistic plan detailing its eventual payment in full.

But try not to “cry wolf” too much, either! In other words, don’t alert the bank in advance if you think you might have a problem; only consider alerting them when it is fairly certain. Don’t give them all the details of your issues and your turnaround plan unless they ask for it.

Generally, if you are going to miss a payment, the bank wants a distant overview picture. They want to hear that you are confident that you think you can turn around the situation. They don’t want to hear all the details.

You may likely be nervous, but calm yourself down and try to sound fairly confident to the bank. They know you have difficult issues if you are going to miss a payment. That’s a given. That’s business and that’s banking. It happens. But they want to hear that you are still confident in your business, still giving it your energy, and still trying to make it happen.

Takeaways You Can Use

  • Don’t cry wolf!
  • Keep your bank informed, and be honest, but confident.
  • Foreclosures are a bad deal for banks, too.

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.

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BusinessTown is an e-learning platform built for people interested in starting and running a business. 

On BusinessTown, you get unlimited access to 130+ business courses taught by real successful entrepreneurs and highly skilled experts. You also gain access to 50+ business tools and to our discussion board, where you can get expert answers to your business questions.

No matter what you want to learn or where you are on your business journey, there is a course for you. 

Marketing, ideas, financing, planning, naming, how to get started… BusinessTown covers everything you need to start and run your business right. 

The courses are available anywhere, anytime, on any device, and you can take them at your own pace. 

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BusinessTown includes unlimited access to 130+ business courses taught by real successful entrepreneurs and highly skilled experts.

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BusinessTown is $19.95 per month. It provides unlimited access to all 130+ courses, all tools, and our discussion board, where you can get expert answers to your business questions.

We offer a free 7-day trial. If you decide that BusinessTown is not for you, then just cancel within 7 days of starting your free trial and you will not be charged at all.

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BusinessTown includes 130+ courses on all business topics: Getting started, business ideas, business plans, strategy, marketing, websites, social media, online advertising, finance, accounting, leadership, sales, legal issues, home-based businesses and more!

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Are you not sure that you are ready to start your own business? Consider our course, What It Takes to Start a Business.

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Do you want to learn about marketing? Because it’s so important, we offer over 30 courses on sales and marketing. Consider starting with the short course, Developing Your Marketing Message.

Want to learn about marketing online? We offer 5 courses on creating websites, 6 courses on digital marketing and 5 courses on promoting through social media. To get started we recommend the course, The Complete Guide to Digital Marketing.

Looking to get inspired and learn how other entrepreneurs succeeded in starting and growing their businesses? We offer several courses on this including, How to Succeed as a Woman Entrepreneur.

Do you already have a business and are looking to improve it? We have several courses on this topic. Try starting with the course, How to Boost Profits.

No matter where you are on your business journey, there is a course for you.   

On BusinessTown you have access to 50+ downloadable tools like worksheets, samples, and templates to help you start and run a business. 

Our most popular tools include:

The Ultimate Startup Checklist, 18 pages 

The 300 Best Small Business Ideas ebook, 105 pages 

The Complete Business Plan Template, 29 pages

Complete Sample Business Plan, 35 pages 

Sample Marketing Plan Under $2k, 12 pages

One Page Marketing Plan Template

One Page Sample Marketing Plan

50 Guerilla Marketing Tactics Worksheet, 8 pages

Business Idea Evaluation Worksheet 

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How I Started a Successful Business with No Money and No Experience, Case Study

Key Questions to Select the Best Business Idea Worksheet

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Using the 6-Step Approach to Choose a Business Idea Case Study

21 Easy-to-Start Part-Time Business Ideas Guide

42 Home-Based Businesses You Can Start Guide

Why I Repeatedly Changed the Legal Entity of My Business, Case Study

Evaluate Customer Segments and Competitors Worksheet

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How I Differentiated My First Business in a Crowded Marketplace, Case Study

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Marketing Bob’s Rent-A-Bike, Case Study

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How I Financed Buying a Business Case Study

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BusinessTown courses will show you how to start your business right and grow it into a highly successful enterprise. 

You will learn from highly experienced entrepreneurs and experts who have been there and done it. You won’t have to learn by trial and error. You won’t have to guess what to do next. BusinessTown courses will guide you through your entire business journey.

Even if you are a beginner you will quickly learn how to start a business you love. If you already have a business, BusinessTown will show how to grow it and make it better.

By just watching one video lesson a day (about 7 minutes average) you can quickly ramp up your business knowledge. No matter where you are on your business journey, there is a course for you taught by an expert on BusinessTown.

What would you like to learn more about today? Starting a business? How to find a business idea? How to write a business plan? How to do your marketing? How to build an online presence? How to get financing? How to prepare financial statements? BusinessTown has courses that cover all these topics and hundreds more.

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