Many entrepreneurs worry that they'll outgrow their early relationships with banks. (See "Will You Outgrow Your Bank?" [Article link].) But not Michael McCarthy, CEO of McCarthy Co., a St. Louis construction company. Although McCarthy has grown his business to $1 billion in sales, he remains close to the local community bank that backed him more than 20 years ago, Mark Twain Bancshares.

"When I hear about growing businesses that break off their ties to their first bankers and rest all their hopes in large banks, I get worried," he says. "The bigger the bank, the more you're at the whim of a very capricious management situation. You never know when the senior executives of a big bank will suddenly decide that your kind of company doesn't fit in with its new business plan and you'll be out of luck."

Consider McCarthy's own experience: "I've continued to do business with Mark Twain Bancshares even when I also needed to borrow larger sums from bigger banks," he says. "And that saved us during one year, seven or eight years ago, when we had unexpectedly large, multiple losses. Our big banks suddenly came up with all kinds of new criteria and required us to pay off our loans, because of our financial problems. Mark Twain stood by us and continued to support us, even creating a new $7-million line of credit for us."

His conclusion: "Big banks often respond to an entrepreneur and his or her special needs with edicts. If you've built a good relationship with a smaller bank, maintain it. You never know when you'll need that extra level of support."