When you’re exploring corporate banking options, there’s a lot to consider—from the track record of the bank to its size and financial capabilities. But for organizations executing complicated transactions in fast-moving, competitive industries, it’s imperative to dig even deeper, says Kevin Lavender, Fifth's Third's head of corporate banking.
"You want your corporate banking partner to be a critical part of your team, providing meaningful guidance and honest feedback in addition to capital solutions," Lavender says.
That’s why as you assess potential banks, consider factors such as their team members' banking expertise and their experience within an industry vertical. Equally as important: the bank’s ability to adapt as your business and industry changes, and their bankers' willingness to offer insights and support in a way that makes the partnership an advantage as you head into a deal.
It’s a tall order. But prioritizing these attributes yields a banking partner that’s ready and able to handle any opportunity and challenge your company faces. As you consider banks, keep these factors in mind.
Deep Industry Knowledge and Expertise
Corporate banking is about far more than simply offering competitive capital solutions. Having access to a banker—or team of bankers—who is also experienced in your industry elevates the value of the relationship, and allows you to be more proactive with your business decisions. Healthcare provides a prime example. "If you're in healthcare, your corporate banking partner should have a solid understanding of Medicare, Medicaid, insurance reimbursements, potential federal policy changes, and industry trends," Lavender says. "You can't accurately have your finger on the pulse of healthcare while also keeping up with constant cyclical changes within the oil industry."
The nuances of specific verticals demand that corporate bankers are also experienced industry professionals who can provide insights, relevant solutions, and an early heads up on issues. In another example, Fifth Third had a client that wanted to finance an acquisition at a higher purchase multiple than the industry standard. “We got it done, because our people knew the space well enough to understand why that multiple made sense,” Lavender says.
Established Corporate Banking Experience
Your corporate banking partner needs the capability to provide sizable financing (more on that momentarily). But in addition to a breadth of capability, you also want a depth of banking experience, which offers context in challenging times as well as good ones.
"You want a banking partner that understands your business and that will stand by your side through all economic cycles," Lavender says.
The importance of this played out with Fifth Third's oil and gas clients during the last downturn. Other energy banks were paralyzed when it came to financing issues and debt. But Fifth Third, understanding the opportunities and risks present in the sector, picked the right clients and worked closely with them through the recession. The bank experienced minimal issues and was one of the first to return to lending and assisting clients into and through the recovery.
"We were able to do this because we had experienced bankers who had successfully navigated tough times before, and they understood the cyclical nature of the industry," Lavender says.
Big Bank Capabilities with Personal Attention
The ability for your corporate banking partner to provide the level of financing you need when you need it is critical, especially for large companies executing billion-plus transactions. But the best banking partners are those that can lead those large deals, while still offering the attention and service of a smaller organization. With the biggest banks, even sizable transactions are still one of many, and clients are left competing for attention.
A regional bank provides a different experience. For instance, Lavender notes that Fifth Third recently facilitated a $1 billion bridge loan to help a client complete a strategic M&A deal. The deal was also in the healthcare space, and the bank was able to not only offer the clients the capital needed, but also work with their C-suite to create an effective solution that accounted for current market factors and the company’s future plans.
"Our bankers are so familiar with the industry that they can adjust very quickly to do what's right for the client and the deal, while retaining the integrity of credit quality," Lavender says. "But then we can also step up with the big checks."
Fifth Third is witnessing similar success in its newer Technology, Media and Telecommunications business. Over the last 18 months, the TMT group has provided a $500 million underwriting in a multi-billion dollar bridge loan for a public telecom and led several infrastructure deals ranging from $80 million to $200 million for privately held telecom companies.
Focus on Long-Term Relationships—Not Single Transactions
All of the above adds up to finding a corporate banking partner that is truly strategic, knowledgeable, flexible, and efficient. It’s easy to find financing when your business is growing and the future is bright. But you want to build a relationship with a bank that will be with your company through the peaks and valleys. Look for banks that have a commitment to your industry and that are genuinely interested in helping achieve your business strategy.
When it comes to complicated deals that require complex capital solutions, the right corporate banking partner can be the difference between success and failure. Keep these factors in mind as you choose your bank, and you’ll land a dependable partner that brings more than competitive rates and terms to the table.