By The Leasing Group

4 reasons to diversify your relationships with financial institutions (Or why you’re not cheating on your banker)

If you’re a successful business owner or operator, chances are you have a good relationship with your bank. Perhaps you feel a certain allegiance to a particular financial institution, so it’s always going to be your first choice when your financing needs increase.

Loyalty to a single bank is great, but might hinder your long-term ability to grow.

Here’s why.

1. It makes you look good. Believe it or, spreading your eggs over several baskets helps build and strengthen your credit history and credibility, which actually improves your chances of getting the financing you need. Similar to diversifying your stock portfolio, extending your credit among multiple institutions reduces your risk. If you have a line of credit and established relationship with only one bank, what would you do if they turn you down for additional financing? It could happen if you’ve reached your ceiling with that particular bank. It’s better to diversify now rather than hit a wall later that could negatively impact your growth.

2. It prepares you for growth. Every bank has limits on the credit it can offer your company. Just like a child who outgrows his clothes as he gets bigger, you may outgrow one bank. But if you’ve diversified, it’s unlikely you’ll outgrow several banks at the same time. One bank may not be able to meet your needs on a particular equipment lease, but another one can. It might be a simple matter of timing. Your credit rating stays the same, but each financial institution looks at it through different eyes because they all have different parameters.

3. It helps you get the most competitive interest rates. Just like shopping around for the best price on the equipment you plan to lease, it makes sense to shop around for the best interest rates. Diversification inspires healthy competition among the financial institutions. You don’t need to navigate those waters alone. The Leasing Group can leverage its strong relationships with local banks to get you the best financing terms.

4. Your banker isn’t an “ol’ ball and chain.” Unlike a possessive spouse, a banker doesn’t want to tie you down and hamper your ability to spread your wings. In fact, it is to a financial institution’s benefit that their clients grow. And don’t worry about any jealousy. Lease financing is transactional; it is not representative of a comprehensive banking relationship. Kind of like a fling versus a marriage. Banks don’t get insulted if you have a few flings.

The Leasing Group can work with you to diversify your financing so you’re prepared to take your company to the next level of growth. Call us at (502) 547-2773 to find out how.