Consultative Banking to Evaluate Using Lines of Credit Lends Itself To Better Business Decisions
“Fast money makes fast friends.” A rather old cliche but one that still has a ring of truth about it.
Many businesses feel that the worst of the economic storm has passed. That is still yet to be determined. But this returning sense of security is leading many businesses to ask their bank for new or increased lines of credit for many reasons, ranging from adding additional inventory to improving their facilities. The reasons vary, but after having had to “tighten their belts” for 4-5 years many companies are feeling the need to start spending again. This is good for the economy in general, but increasing spending via a line of credit (borrowed money) may or may not be in your best interest right now.
Many banks sole criteria for determining if a business or its management qualifies for a line of credit is strictly by credit score. There are very few businesses with a lengthy history of extending credit to their own customers that won’t tell you that this is a very narrow, and often times very risky, means of determining if a company truly has the means to repay money borrowed from an extended line of credit. There can be many mitigating factors that undermine companies with impeccable credit scores from making timely payments on secured or unsecured loans.
At Regents Bank we take a different approach to extending lines of credit to our clients or those companies that approach us pledging to become clients if credit is extended. Certainly we look at credit scores, financial documentation and cash flow projections to determine if a line of credit is a safe investment for the bank. But what separates Regents from most other banks is the time we take to really understand what a business is trying to accomplish with the additional funding and how it fits into their overall business plan. We call it “Consultative Banking” and it plays a large part of what makes Regents Bank a partner, not just a lender.
A line of credit may be just what your company needs right now. Or perhaps there is a better, more cost effective means for you to accomplish your goal without using additional credit or borrowed funds. There’s only one way to tell; talk with an experienced Regents banker that will provide you with alternatives based strictly on your situation. At Regents Bank we are in the business of helping companies grow and prosper, and that can often times be accomplished via means other than lines of credit or borrowed funds.
We have branches conveniently located near you in La Jolla, San Diego, Carlsbad and El Cajon, CA, as well as a branch office in Vancouver, WA. You can learn more about Regents Bank and how we do business at https://www.regentsbank.com/#/business-business-advisory. Before you sign on the dotted line and borrow money from a bank that is eager to give without understanding what your situation is, take the time to consult with Regents Bank. You’ll find a team of highly qualified bankers that will take the time to recommend what’s in your best interests, not ours.