Business banking has changed very significantly especially over the last 12 months. At one time, if you were a customer of the bank for 35 years, that meant something. If your bank manager knew you for 35 years that meant something. Now it is no longer critical. If you bank manager knows you, he will view your application but the banks have taken away the credit decision from the local bank branch. Now all numbers must fit into a small matrix and if your numbers do not result in the correct number, you do not qualify for the loan. Your bank manager may tell you and ask to see if you can make any changes to the financial statements to make the ratios work. If your accountant sends a draft financial statement to the banker, you may have some discretion about making changes, for example decreasing the amount of bonus paid. Once your financial statements have been finalized, you have no ability to make adjustments to the financial statements.
Even though the credit is now longer at the discretion of your bank manager, a good relationship with him is imperative. If times gets tough and you default in your loan covenant, the manager may work with you to get things back on track. If you relationship is antagonistic, your defaulting in your covenant may be a quick way for your banker to call the loan.
If you have a good relationship with your banker, they can keep you abreast of some of the changes in the bank, are they reducing the portfolio of say real estate loans, will they only provide real estate loans to existing clients, are they no longer interested in certain types of clients? They can give you a heads up on what could impact your business if you have a loan renewal in the future. Knowing your banker is important. Some people just see their banker once a year at loan renewal time. In good times the relationship may not be important if you are above all your covenants, in bad times you may need your banker. Do not wait until bad times to get to know your banker, by then it may be too late.