Do the Math: Does Your Bank Add to or Subtract from Your Bottom Line?

We are currently in the midst one of the most challenging economic times in history. If your bank is not a strategic advisor and business partner, then it is probably costing you money.

What does that mean?

  • Most banks offer similar loan products and services.
  • Most banks will come within a quarter or tenth of a percent on interest rates.


  • Not all banks will prioritize your small business, spending more time and energy on “big fish.”
  • Not all banks will take the time to get to know your business well enough to offer real solutions. They might prefer to serve as “order takers” and simply respond to your requests.

Your Business Is a Math Story Problem

Let’s consider an example of what adding to your bottom line actually looks like. I recently had a customer ask about a loan for a new piece of equipment that would enable them to increase production by 15–20 percent.

As part of the loan process, I visited the facility for a tour. During the tour, I asked questions, such as where they would store the additional inventory. The increased production would require room for the 15–20 percent increase in raw materials, as well as the additional finished goods. Their storage areas for inventory were already completely filled. They would probably need an addition. More discussion revealed they were already working mandatory overtime because of a labor shortage. Now when they did the math, their margins dropped to only 3.5 percent.

In this case, the customer chose not to purchase the new machine until they could improve the expected returns.

In another example, a customer was looking to put on an addition to their building. Toward the end of this tour, we walked into an area with thousands of cardboard boxes and packing peanuts. I asked them what they spend on boxes and packing materials.

In addition to giving them information on what it would cost them for the expansion loan, I suggested an alternative. They could instead install a movable racking system and switch to purchasing raw cardboard and a box cutting machine, which would actually give them the extra space they needed. After reviewing the numbers, my customer decided against the addition for now, foregoing a sizable mortgage loan and instead utilizing his existing space more efficiently and effectively.

I may have lost his mortgage loan this time, but I have a business partner (customer) for life because I’m always thinking about what is best for his business and his bottom line. In fact, that company did eventually do an expansion, but was able to postpone that construction roughly five years and budget for a portion of the project.

Those decisions become easier when you do the math.

Signs Your Bank Is Focused on Addition (Not Subtraction)

A business banker with a solutions mindset will often avoid taking about rates and terms even if they work in your favor. That’s because the minor differences are not going to make or break your math story problem.

The real sign of a good solution is when your conversations focus on the following goals:

  • Saving you time.
  • Saving you money.
  • Helping your business grow.
  • Helping your business change or transition.

I talk to hundreds of manufacturing leaders and industry specialists each year and learn something from every one of those conversations that might be helpful to your business. Your banker should bring you ideas, opportunities, and answers. Our goal is to solve your math problem.

Does Your Business Need a Solution?

Whether you would like to discuss a math problem that needs an immediate solution or perhaps want to bounce possibilities off of problem-solving partner, State Bank of Cross Plains has a team of commercial bankers who can offer strategic thinking with your best interests at heart.

To start a conversation, please reach out via email or give me a call at 608.516.0609 today.

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