Losing Your Lender

When a preferred loan officer moves on, small-business owners should treat it as an opportunity to step back and re-evaluate their loan relationships.

Most small business owners, at least once in their professional careers, find themselves in a situation when their lender -- a lending officer, loan officer, or account officer -- leaves the bank. If this hasn't happened to you yet, chances are it will. For businesses just starting out, your relationship may be too small for a lending institution to provide a dedicated lender. But as your business and loan relationship grows, you will eventually work with a "personal" lender and then fully appreciate the benefits of having one.

While losing that relationship can be disrupting, it may also garner new opportunities, though you may not always recognize what they are. More importantly, you must understand the risks and benefits it can bring.

A lender's decision to leave frequently results in a phone call to some of his or her better and more profitable customers. While poaching customer lists of former employers is considered to be unethical (if not illegal) by some and officially frowned upon, it is a reality of life and happens quite often. The loss of a lending officer for one organization means potential opportunity for the other in bringing in new customers through the newly hired lender.

If you find yourself in this situation, you have three options:

The ubiquitous: do nothing and stay where you are.

Explore what the lender's new lending institution has to offer and move your relationship, if you like what you see.

If you are unhappy where you are and if someone else can offer a better deal, put your loan relationship "on the market" and move to some other lending institution.

Ask yourself one simple question: How happy was I with that lending officer? If the answer is negative, think twice about the offer to transfer your accounts.

If in doubt, consider asking your lending officer the following:

• Why are you leaving your current organization?
• How and why do you like the new organization?
• What are the pluses and minuses as compared to the previous one?
• What products and services does your new organization offer? How different are they?
• Will you continue to be my primary contact at the new organization?
  
• Will you have qualified staff to ensure that my business is taken care of in your absence?
• How can you ensure a smooth transition?
• What guarantees are you able to offer for speedy and smooth transition?
• What’s the timeline to move my relationship?

Also, don't be afraid to ask yourself these same questions. Then, analyze the information and decide what's in your best interest. If you like everything you hear, one option is to sign up for only one or two services, such as a small line of credit or a deposit account, and test-drive it for a little while. If you are satisfied with the services offered, move to the next step of transferring your other accounts. If not, this experience may save you from a costly mistake.

Remember that moving your various loan and non-loan relationships takes time -- sometimes a lot of time -- and effort. Not everything always goes smoothly, which may impact your ability to service your customers or run your company well. What matters is your lender's ability to fix problems quickly. Above all, make sure that you have full faith and confidence in your lending officer's abilities and in what the new organization offers.

Even if you decide not to follow your lender, it is still a good opportunity to reevaluate your existing loan relationship and determine if you are satisfied. It might be time to look for a new service provider anyhow.

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