Sunday, 22 July 2018

Information and commentary for the small business banking industry

How banks can help small businesses raise finance creatively

13 Apr

Business banking relationships – more than just loans

One of the main reasons that banks develop relationships with small businesses is finance. Usually it’s about lending solutions, but banks can – and should – cement their relationships with their small business customers further by offering finance solutions that aren’t just about loans.

It’s no secret that successful banking relationships are based on more than just what loans are available. The best partnerships are when banks become more than just a lending solution – they become trusted advisors.

So one of the best ways a bank can improve its relationship with its small business customers is to help them find creative ways to raise finance.

Get creative about finance advice

It’s one of the biggest challenges that small business owners face – finding and accessing capital to grow their business. What a bank should be looking to do is guide them towards finance solutions they may not have otherwise thought of, such as:

  • Travel smartly – if their business involves travel, the trips can be used to research new markets and identify any growth opportunities.
  • Smart use of credit cards – it’s a good idea for everyday expenses like travel to be charged to the business credit card, as this slows down the amount of cash going out of the business. Show customers how to make the most of the interest-free period.
  • Lease rather than buy equipment – although it’s important to have the gear needed to manufacture a product or provide a service, leasing it only when they need to can help free up capital.
  • Learn to negotiate – as financial mentors, banks can provide their small business customers with quick “how-to’s” around negotiating astutely, both with their own customers and with their creditors.
  • “Love money” – it could be that small business customers have family or friends who might be interested in investing in the business, but haven’t been approached.
  • Grants and subsidies – together with your small business customers, research what business grants might be available, and which they might be eligible to apply for. Small business owners are often unaware of what government is on offer.

The bank

Most banks are pretty flexible with their small business lending packages. It could be that just by sitting down with your small business customers, and discussing their financial needs, you can restructure their current loans to help free up more capital, without jeopardising the bank.

Help them to recognise their strengths and assets, and go through their business plan with them so that it’s honed and up-to-date. Work with them to make sure they’ve got the right borrowing solution, and offer advice on things like what to do after they’ve landed a big contract.

At the end of the day, banking relationships are about so much more than just lending money. The more you understand about your small business customers and their businesses, the better placed you’ll be to help them succeed.

Here at TSBC, we can offer you great content around raising finance creatively and helping your small business customers. Contact us on to find out how we can help you.


Glen Senior
Glen is the founder and CEO of The Small Business Company, a New Zealand based agency that specialises in helping banks communicate with small businesses through content marketing. He has written a number of books on small business principles and is a sought after consultant and conference presenter.

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