When it comes to business loans, you might think bankers only care about the numbers. But there are some banks that like to know more about their clients than just how well the company is doing. For them, the true test of a successful relationship comes down to character.
Canadian Western Bank (CWB) is a bank that puts a lot of weight on the people behind the loan. Russ Burke, CWB’s Nanaimo branch manager, says while the bank’s business loan decisions obviously need to be based on a good understanding of the client’s business, market environment and prospects for success, character is often the deciding factor.
“A banker has to be a good judge of character, which is not always an easy task,” says Mr. Burke. “For me, it comes down to honesty and integrity; those are the two most important traits that I look for.”
“Understanding a client’s character is the basis on which we build a relationship of trust; I need to have trust in my client, and they need to trust me to do the best I can for them,” says Mr. Burke. “We try to be entrepreneurial in how we approach a loan application, finding ways that meet both the client’s needs and the bank’s requirements.”
Charlie Parker, broker owner of RE/MAX of Nanaimo is one of the clients with whom Mr. Burke has built a strong working relationship.
“We see it as a partnership between the two of us. Russ has a vested interest in the success of my business, and I in turn can rely on the support and advice of the bank to help me achieve that success,” says Mr. Parker.
And just as Mr. Burke seeks good character traits in his clients, Mr. Parker believes clients also need to seek out a banker with sound character.
“Your banker needs to have a genuine interest in your business. While they obviously need to look after the bank’s interests, I need to feel that they are also looking out for me and my business,” he adds.
Dave Thomson, vice president of credit risk management at CWB, heads a team that assesses loan applications that come in from the bank’s branches. Rather than judging a client’s character in face-to-face meetings, his team’s decisions are based on the paper-work and on reports from the branch and account managers.
“We need to see that a client knows their business and has a clear understanding of what it takes to be successful in their industry. We look carefully at their history, expertise, business model and business plan to validate their character and management skills. We need to be confident they have the skills, knowledge and wherewithal to be successful in their venture,” says Mr. Thomson.
Branch and account managers are the credit risk team’s eyes and ears on the ground and are expected to gather intelligence that supports the decision on a loan application. What the team wants to hear is that a client has integrity, knows their business and has good prospects of success.
“I encourage our branch and account managers to ask their clients what keeps them awake at night, what’s important to them and what they track in their business,” says Mr. Thomson. “If they can provide good answers to those questions, we feel more comfortable that they understand the key risk factors that drive their business.”
He adds that the information also helps CWB tailor loans that suit individual clients.
“We like to structure our credit facilities so that they are entrepreneurial in nature; not cookie cutter. Our aim is to meet clients’ needs and expectations and not simply give them something out of the box that they could get at any bank,” says Mr. Thomson.