When a part-time CFO is engaged by a company, he/she immediately looks to build strong relationships with outside professional service providers. Early on, the CFO will reach out to the banker who is providing services to the company. What should your response be to the call from the CFO?

Common Issues Bankers See with Their Customers and Prospects

Let’s first look at the issues you are likely seeing at the company. Most bankers tell us that they see the following issues with their customers and prospects:

  • They are likely bankable but they don’t have the internal resources to produce quality financial or operational forecasts to support increased lending;
  • They lack the visibility to know when they are breaking the covenants attached to their outstanding loan;
  • Their business decision-making processes are such that they have consistently poor internal cash generation that drives persistently high debt levels;
  • The business owners know what they must do to survive or grow but don’t know HOW to do it.

With those issues in mind, most bankers agree that the best resolution to these issues is a financial professional who is on “the company’s team.” They understand that many small- to- midsized businesses can’t afford and don’t need a full-time CFO. However, part-time CFO services provide the necessary financial expertise at a cost that fits within the company’s budget.

How Bankers Benefit from Part-Time CFO Services

You receive significant benefits from the company’s decision to add a part-time recurring CFO. The CFO understands the importance of building a solid relationship with the company’s banker. Therefore, the CFO will ensure that professionally done forecasts support all requests for lending, ensure loan covenant monitoring programs are put in place, and the CFO will look to improve the company’s decision-making process which will result in better decisions being made and increased internal generation of cash flow. Lastly, the CFO will work with the owner to implement processes and performance metrics that will help the company grow.

The benefits of having a recurring part-time CFO on the company’s team are obvious for the company. But what about the banker?  You gain a true partner at the company—someone who properly values the banking products and services that can help the company grow. As the company grows, its risk profile to the bank declines, the company needs additional products and services which will grow the relationship with the bank (and you) and it is much more likely that the bank has a customer for the long term.

So what should your response be? I think it should be “how soon can we get together”?