While the banking industry has become more competitive since the recession, banks are still eager to provide loans if businesses have a good plan for growth, enough collateral and a knowledgeable banker.
But it's the knowledgeable banker that could be the real gold for business owners, experts said Thursday at the Newsmakers' Forum on banking and finance held at the Drake Hotel Oak Brook.
"A good banker is like a free consultant for your business," said Karen Lennon, founder and president of Wessex 504 Corp. in Chicago.
Lennon, along with Linda Koch, president and CEO of Illinois Bankers Association; and M. Colleen Ryan, president of Inland Bank and Trust in Oak Brook, discussed the state of banking, loans and assistance for businesses provide some advice and information during the Newsmakers' Forum held at the Drake Hotel Oak Brook. About 100 people attended the event hosted by the Daily Herald Business Ledger, Inland Bank, Wessex 504 and others.
Koch said there are fewer banks now than before the recession due to consolidations, closures, use of new technology and other reasons. That consolidation has led to a more competitive environment where banks are vying for your business.
"Bank consolidations have been going on for some time, but it picked up the pace since 2008," Koch said.
Also add the more prevalent use of technology to the mix, and it changes how businesses work with banks, Koch said.
In addition, there's more regulation and a more political environment, which makes it tougher on community banks to keep up with the costs involved in complying with new regulations due to their limited resources and need to build capital.
Business owners need to develop a relationship with bankers to understand the regulations, understand the risk the banks may see if they invest in them, and be open to various loan options to fit their current needs, Koch said.
"You really need to have a good business plan for growth, and how you can repay the loan if there's adversity," Koch said.
Ryan said many business owners do not look closely enough at the Small Business Administration loans because the federal agency does not advertise what's available.
"You can find loans for women and for minorities and others, and they change all the time," Ryan said.
Business owners need to have bankers look at which loan fits their needs now, Ryan added.
"There are misconceptions that SBA only does small loans, but the average in Illinois has been about $360,000," she said.