How to Leverage your Banking Relationships to Grow your Net Worth:

Jens Hansen, Vice President at Hilltop Bank, discusses what a successful commercial banking relationship looks like, addresses what to expect when applying for a commercial loan, and walks through the commercial lending process.

A Successful Commercial Banking Relationship:

The goal of any business owner is to see their business grow and prosper. In many cases, properly leveraging a business's reputation, experience, and assets can facilitate or expedite that growth. The relationship between a customer and their Commercial Banker requires effort from both parties, like any successful relationship. It’s all about communication between you and your banker to ensure efficiency when applying for a commercial loan.

A successful Commercial Banking Relationship is one where both business owners and their chosen bank can find success, and also where owners are able to:
  • Start their business
  • Grow their business
  • Manage their business
  • Increase their net worth

Commercial banking relationships are both intensive and rewarding, as both the customer and banker are in contact on a regular basis, updated financial information is provided regularly, and commercial loans are subject to frequent regulatory examination. The transaction amounts for commercial loans are higher, and in many cases, so are the risks. 

What to Expect When Applying for a Commercial Loan:

Many business owners are unfamiliar with the commercial lending process and are unsure of what to expect. The commercial lending process is one that takes time and effort. Communication is vital to keep this process as smooth as possible, and preparation and research will only improve this process. Hilltop can help our customers find success only if we are provided with written information that is:

  1. Honest
  2. Thorough
  3. Accurate

It is our job to determine the financial health of the individuals behind the business and to spot patterns or changes in an individual’s finances that could potentially impact their business as well as their ability to borrow. 

The Commercial Lending Process:

  1. An application
    1. a snapshot of the individuals and company requesting a loan as well as the initial loan details
  2. A personal financial statement 
    1. Snapshot of an individual’s assets, liabilities and net worth at a point in time
  3. Financial information and tax returns
    1. includes the PERSONAL tax returns of all of the business owners
  4. Business plan
    1. Company or Business Description, Market Analysis, Competitive Analysis, Management and Structure, and Marketing/Sales Strategy
  5. Financial projections
    1. Financial goals and expectations for the company

You might notice we will be getting to know a lot about you. The more information we have, the more we can advise, assist, and ultimately become more valuable to you as your chosen commercial loan provider. Thoroughly and accurately completing every step of the commercial lending process goes a long way towards building trust between a commercial banker and our clients.