DO NOT call a bank blindly. Know the best banker to speak with first.
I’ll bet you’ve seen this one in your dental Facebook groups or forums. Someone posts, asking for tips on which bank to go with. One person chimes in and says they got their loan through Bank of America, and they couldn’t be happier. Another one replies and says no way, they went through BofA as well and their experience was terrible.
What gives?
What I don’t see many, if any, armchair consultants saying is which banker they worked with. You don’t get a lot of “Jane at Bank X was fantastic, here’s her number.”
Want the best rate? Want the best loan experience? You have to talk to the right banker.
If you call a bank out of the blue, you’ve potentially made a big mistake.
Your instinct is good—you want to get the ball rolling on your loan, or maybe just hunt around a bit for which bank has the best rate and terms, for future reference. Good, you should! But before you make that call, there are things you need to understand about how banks—and bankers—work. Here are three things to know, followed by an all-important piece of advice.
1. The law of large numbers means someone sucks and someone is great.
Big banks have 60+ bankers nationwide working on dental loans. And the law of large numbers means that a few of those bankers will be great, most average, and a few will suck. Rolling the dice and randomly calling banks means that most likely you’ll get someone average, and you might end up calling the guy who’s about to get fired. Even if you get an average banker, an average banker means an average rate, average loan terms, and an average experience. If those dice roll badly, then all of that “average” stuff turns into “awful.”
The benefits of a great banker are massive. With our help, our clients work with the best bankers and get the best possible loans, and save on average over $35K on their loan.
2. Within certain guidelines, banks have more flexibility than you might think. A good banker exploits this.
There are certain guidelines that banks almost universally work under. Lenders need a good credit score (usually 680 or higher); they should have decent liquidity (cash in the bank); they need professional experience (at least a year of solid production history); and so on. But what look like black-and-white requirements at first glance are often more like guidelines.
Banks say they want you to have a year of experience, and for good reason—you need to prove you can handle the job. You’re pretty close, at 10 months out of school. Banker Susan sees that your production history in those 10 months is impressive, as is the cash reserve you’ve built up in a short amount of time. She goes to her boss to make an exception for you. Because Susan has been good at spotting good loan candidates in the past, her boss approves the exception and you get the loan.
3. The “relationship” is a red herring.
One of the most annoying, and recurring, conversations that I have is with bankers who are trying to get more business from us. They think they can do a better job than the guy down the street at the other bank, and want us to refer more of our clients to them.
“Happy to,” I’ll respond. “But you’d have to give me a good reason. What makes you different from John at Big Bank & Loan?” Almost invariably—and I mean 99.9% of the time—I get the following response: “We care about our clients! I know how to provide great service and build a good relationship.”
I press a little. “That bank is currently offering a rate of X. Is yours substantially different?” They hesitate. “Well, no, that’s about in line with us.”
I continue, “The other guys have these fees in place to originate a loan and often waive them for our clients. Do you waive those fees?” Now they’re getting a bit uncomfortable. “Well no,” they admit.
So what do they mean when they say they “care,” or that their service is the best? When you get down to it, it means…nothing. A good relationship with your bank is one where you can get the loans and the banking you need at as low a cost and as little hassle as possible, period.
Bottom line: Don’t call a bank until you know who to call.
Most banks dictate that the banker you talk with first is the one you work with on your loan, not necessarily the one assigned to your territory. And the idea of bankers having a “territory” is becoming somewhat outdated, since most bankers can and will work nationwide.
So if you call the bank and John gets on the phone with you to talk through a possible loan, then as far as that bank is concerned, John is your banker, from start to finish.
Bankers are paid largely on commission for the number and size of loans they issue, so they’re fiercely competitive, not only between banks but within banks as well. John does not want Susan down the hall to get your loan. John will lose out on the commission, so you can imagine how upset he’ll be if you try to switch to Susan. Because of this, banks put systems in place to prevent much internal switching of clients between bankers.
All of this means that no matter how much better Susan might be for you, you’re stuck with John if you want to work with John’s bank.
At Dental Buyer Advocates, we’ve worked with and built relationships with a lot of bankers over the years. We know who the proven bankers are, because they’ve worked hard, been responsive, and compromised effectively to win our clients’ business.
Getting you to the finish line on your practice purchase, while saving you as much money and hassle as possible, is what we do. Give us a call or sign up today to take advantage of our years of experience working with the best bankers in the country.
