INTERVIEW ON THE PRICE OF BUSINESS SHOW, MEDIA PARTNER OF THIS SITE.
Beware of Your Banker – Even if He is “Your Friend”Last week a bank decided that the loan for one of its customers was getting riskier. The bank froze the company’s account without warning. Yes, the bank can do that.A company was late on a loan payment so the bank automatically deducted the loan amount from their checking account.Yes, the bank can do that.Despite that the line of credit was current and the terms of the loan were in compliance, the bank called the loan because lending policies had changed. It almost put the company out of business.Yes, the bank can do that.Read the fine print when you borrow money from a bank.
YOUR BANKER IS NOT YOUR FRIEND.Sure, bankers say anything to get you to put money in their bank and to take out loans. That’s how they make money. The policies of the bank can change with new management or new owners. The bank can change its mind about your loans and call them. The bank can deduct loan payments from your account. Even if you have a so called “friend” who is your banker, he or she reports to someone and doesn’t make the final call. But, you say, my friend is the president of the bank. Maybe. But there are board of director decisions, lending committee decisions, and rules that the president of the bank has to follow.So, how do you protect yourself?Always, always, always have two or more banks that you work with (I have three).
Put your payroll account in one bank. Put your operating account in another bank. And, put your maintenance agreement savings account in a third bank. This is the best way to protect your business and your cash. And, if you can’t pay a payment, call you banker before he calls you. It is much better to explain the situation and when you will be able to make a payment rather than waiting for your banker to call you. I promise, your phone call will NOT be the first phone call he has taken with this message.
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The Price of Business is one of the longest shows of its kind in the country and is in markets coast to coast. The Host, Kevin Price, is a multi-award winning author, broadcast journalist, and syndicated columnist. Learn more about the show and its digital partners at www.PriceofBusiness.com (scroll down to the bottom of the page).