Our economic drop off has people nervous. For a nonprofit I’m involved with, someone called and told me not to cash a recent donation check – it seems that they closed their checking account in Wachovia, moving it to a local, regional bank. A lawyer friend is worried that his bank, a division of a large bank holding company, will cut or shut down his firm’s line of credit. For both people, they more concerned about the health of the bank, or whether it would have to be taken over or shutdown, moves that could slow or stop their access to their cash and services.
My informal impression: a practice with a good credit standing, and more than one physician to personally guarantee the loan, should be in pretty good standing to obtain financing. It’s the large borrowers who are more likely to have problems. Look at it this way: a bank lending $50,000 has little at risk in the grand scheme. Even for the largest banks, lending $50 million or more is enough to give people some heartburn. In an ironic turn of events, it may be the smaller firms who are viewed as less risky, as a default of large loan that can single-handily do more damage to the bank than a series of small defaults.
If you haven’t done so already, call you banker today. No one can make promises, but having the local banker on your side and as your advocate puts you in a stronger position should you need to access credit. It’s also the time to call on 1-2 new banks and start developing a relationship for the longer term.
Put your practice administrator to work here. If they are more of an office manager than a business person, start to bring them into your meetings with banks, your accountant and others, as part of their professional development. To reiterate my general advice: physician practices operate in the local economy, and your ability to grow and thrive over the long term will be greatly enhanced by the relationships and networks you build within the business community.