Your relationship with your banker is never more important than when times get tough. Unfortunately, some business owners tend to steer clear of their bankers just when they need them the most. If your business is heading for trouble, resist your impulse to hold off on a meeting until you have good news to share. It might not happen.

The following advice was culled from Inc reporter Kate O'Sullivan's interviews with a handful of bankers about the impact of the terrorist attacks.

1.) Communicate early and often with your banker. Keep your banker apprised of your situation and what you are doing to improve it. Too many businesses wait too long to tell their bankers the bad news.

Ralph Sillari, executive vice president and managing director of regional banking for Fleet Bank, says, "I think all small businesses are going to have to pay more attention to the operating integrity of the business: How quickly are they collecting their money? Are they hitting their revenue goals? Are people paying them on time? How are inventory levels of not only widgets but also people and expense pockets doing? They need to be more in tune with what's happening with the business."

Steve Bauer, national risk manager for business banking at Bank One, says, "It's no different than health-related matters--early detection and recognition of reality is the best recipe for success."

2.) Think like a banker. Watch for the early warning signs that spell trouble to bankers. Jim Lynch, president and CEO of Leaders Bank in Oak Brook, Illinois, deals mainly with small privately held businesses in the Chicago area. "We pay particular attention in times like these," he says, "to the typical early warning signs:

  • If [ the bank's] customers become overdrawn more than they have in the past
  • If their loan payments slow down, or
  • If we don't get financial information on a timely basis.

Those are all very clear early warning signs that something's going wrong. The first two measures show that something's happening with their cash flow. Slowness of financial information in and of itself may not mean anything, but in my experience people are reluctant to share bad news about their business. So oftentimes the information flow is much slower if they're having trouble. "

3.) React quickly to changes in the business climate. Too many businesses wait too long to adjust to deteriorating conditions.

Bauer says small businesses "need to be fundamentally aware of how the environment affects their operation, and they need to be prepared to react quickly to circumstances so that they aren't caught in a situation where they're overextended or building up inappropriate levels of inventories or other business assets that can't be utilized."

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