Centers of Influence (or COI’s for short) represent the main referral source for the most successful of commercial loan brokers.
Simply put, successful loan brokers don’t waste their time chasing down individual businesses or unproductive leads. Rather, successful brokers spend their time and energy developing and nurturing relationships with “trusted advisors”. Trusted advisors are the people closest to business owners who will be aware of the business’ needs, sometimes even before the business owners themselves becomes aware of them.
There are many COIs, but the “Top 2” for successful commercial loan brokers are Bankers #1 and CPA’s #2. In this article, we will focus on how to build your relationships with bankers.
The first step is to change your thinking: Bankers are now your target customers, not the individual businesses. This is because a close relationship with a banker can mean 10, 20, or even 50 referrals each year. So your relationship with one banker offers much more payoff than your relationship with any one individual business owner.
But what makes Commercial and Business Bankers tick, whether they are at a large and small financial institution? You must understand that bankers are smart, intimate with their clients, and fiercely protective of their business customer relationships. When dealing with bankers, you had better “know your stuff” – the types of loans you can fund, pricing, the details of your process, and timing to close to name a few – as bankers do not suffer fools gladly. In most cases they will not give you a second chance, so a great first impression is a must.
WIIFM (or What’s In It For Me).
Bankers are compensated on loan originations AND the associated deposit products (checking, savings, treasury management, and so on). This means that they take a big-picture approach to relationships with clients. They have the client’s success linked to their own, so when a banker is unable to provide clients with traditional funding, he or she will look to alternative sources to find the capital the client needs. Smart bankers do this as a way to promote goodwill with customers and retain their relationships. And this is where successful loan brokers come in.
By focusing their business and relationship development efforts on bankers, smart brokers can become a valued and trusted resource. It all hinges on whether the banker truly believes that you will be able to help when one of their customers needs financing. This trust and your ability to close deals and get clients funded, turns into the “gift that keeps giving”. Once the banker is confident that you are knowledgeable, effective, and have the banker and his customers’ best interest at heart, the deals will start flowing rapidly.
Continue to do it this way and the banker will continue to hand-off these opportunities to you. They will also tell their colleagues and make introductions for you, starting the cycle starts all over again.