Question: I own a business and have not needed, before now, to apply for a loan. If I did obtain a business loan from my bank, would I be taking on any obligations beyond making the scheduled payments?

— Biff from Tucson

Answer: If you obtain a business loan, your lender will want to maintain a healthy business relationship with you in order to serve you appropriately and to be aware of your business's progress. Maintaining a positive and proactive banking relationship is a main ingredient of a successful business plan. In addition to your having a deposit relationship with your bank, lenders often ask for three specific considerations:

First, communicate with your banker and let him know you are involved in all financial matters within your company. Share both the successes and the challenges. Be available to meet with him, ask questions, and listen to suggestions he might have. Invite your banker to your office and show him around. Familiarize him with your operation so he can respond better to questions that might arise during loan reviews.

Second, be familiar with the loan agreements you signed because they might contain covenants that will require you to maintain operational thresholds. Be acutely aware of these covenants and know how they are calculated. Keep track of all your financial statements including dates they are due to your lender, and provide the statements in a timely manner according to the loan agreements you signed.

Finally, to successfully meet any new challenges that come up, manage your overhead and cash flow. Stay in regular contact with your banker and, if necessary, share ideas about selling business assets or infusing capital into your business.

If you consider your banker as a part of your management team who shares interest in your business's success, you will likely find more options available to you.

Bob Vreeland is a senior vice president specializing in commercial real estate lending with Commerce Bank of Arizona. He may be reached 382-5570 or via e-mail at

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