Spirit of Lending Hasn’t Disappeared

I am a banker. I don’t have a corner office in a skyscraper overlooking Manhattan. You’ll find me on the second floor of an ordinary building in Pasadena (although we do have a great view of the Rose Parade once a year). I’m not a corporate titan or a faceless fat cat. I’m a local businessman who helps other businesspeople. My business is money – protecting it, growing it and lending it. That last point is important. Many think banks are hoarding cash after their big bailouts while America twists in the wind. Not at our bank. We didn’t get a bailout and didn’t need one. And we are loaning money. Many people remain apprehensive during this economic downturn. Business owners are among the most cautious, the ones who manage their companies well, satisfy their customers consistently, and always plan for the future. Right now, they don’t see a future that warrants taking on new debt. Sales and markets are shaky. Washington and Wall Street are still full of surprises. On top of it all, self-appointed pundits keep saying, “Good luck getting a bank to approve a loan.” It doesn’t take luck to get a loan these days. It takes preparation and a spirit of partnership between borrowers and banks. That spirit is alive and well in thousands of institutions across the country. We are actively looking to work with business borrowers and will help them gather the information needed for a loan application, guide them through the loan application process, and ask reasonable questions about their business. These questions will focus on the past and future performance of the borrower, the purpose of the loan, the length of time the funds will be needed, and how the loan will be repaid. Bankers will work closely with customers to determine answers to these questions for the good of the borrower and the bank. Finding the right bank Especially in a difficult economy, the most important step borrowers can take in preparing to apply for a loan is to find a bank and a banker that will take the time to understand them and their businesses. It is through knowledge and understanding that bankers are able to develop successful banking solutions for their customers. The bank should also be well-rated, have a good reputation for customer service and for working with borrowers to meet their needs. The borrower is entering into a relationship that should last for some time, so it is important to find a bank that will be there for the borrower in the future. Bankers aren’t the only ones who get to ask questions. Borrowers should ask plenty of their own, including: How long has the bank’s average business borrower been a customer? Is the bank willing to provide customer references? What is the bank’s experience in the borrower’s industry? Will the banker be on hand to take the borrower’s phone calls? Is there a backup to handle calls when the banker is out? Is senior management also accessible? Ask questions Don’t be afraid to ask tough questions. Every good banker I’ve seen during my 30 years in the business loves to answer them. The pundits who say banks have closed for the duration are telling American businesses to do the same – hunker down, hide out, disappear. Forget about investment, expansion, or opportunity. I doubt many of these “experts” have ever made a loan or a payroll. I’ve done both and I’m happy to tell you two big reasons why a prudent borrowing program could be an excellent move right now: It is advantageous to have your credit facilities in place prior to the time that you may need them. When your sales begin to grow, you will be able to meet the new demand by purchasing needed inventory or machinery. Don’t let the media or the politicians tell you what’s going on at your local bank. Come see for yourself. We want to talk to you. And we want to lend. David Malone is CEO and President of Community Bank, based in Pasadena, with 14 branches in Los Angeles, San Bernardino and Orange Counties including the San Fernando and Santa Clarita valleys.