The bank expects to be paid back. To ensure it is, it requires security to guarantee the principal of the loan. Each of these factors, and a few others, are applied to a scoring grid. We tend to talk only about the negative aspects, but in fact, most bank relationships function very well. In many cases, the banker is a true partner of the business.
Effective relationships begin and end with timely, honest communication.
If you expect a downturn that may require some extra financing or that will bring you close to your line of credit, the earlier you tell your banker about it, the better off you will be. In one case, a company was experiencing a slump because of changes in government regulation. The owner quickly passed the information on to his banker, who went out of her way to support the business through tough times. The message you send when you communicate early is that you are in charge of our firm and you are aware of what's going to happen. This tends to give bankers great confidence in your character and management ability.