Five Ways to Enhance Your Banking Relationships

Five Ways to Enhance Your Banking Relationships

by Barry M. Pelagatti, CPA | Mar 01, 2021

Financial services are critical to the long-term viability of an organization, yet the global pandemic and the resulting economic uncertainty presents a challenge even to the most well-established banking relationships. Over the past year, lenders and borrowers contended with the introduction, and regulatory evolution, of new federal programs – such as the Paycheck Protection Program – and the frustrations of maintaining operations amidst public health regulations. Here are a few tips for fostering productive communications with your lender during difficult times and beyond.

Get Prepared

Understanding what information and documentation your financial institution needs from you and the preferred format or optimal presentation is a helpful place to start. Establish a cadence of touch points with your lender to discuss recent achievements and challenges. Make sure you understand loan terms and any applicable covenants, both the financial and nonfinancial requirements. CPAs can play an important role in this process, providing the necessary and accurate information to support these financial reporting covenants. 

Be Transparent

A successful banking relationship starts with communication. Banks want to be informed up-front about matters of potential loss to their customers; they do not like discovering them later in the process. Share all relevant information – both good and bad – with your financial institution. Transparency is critical when it comes to applying for credit, evaluating ongoing financing needs, and maintaining a plan for strategic and operational changes, and it allows lenders to develop plans that are acceptable to regulators and attractive to borrowers. Before you submit any type of credit request, make sure your lender has a firm understanding of your business’s strengths and vulnerabilities, as well as short-term needs and long-term strategic plans. 

Broaden Connections

Never be the only person who maintains your organization’s banking relationship. Exclusive relationships or monopolies on certain contacts represent a significant risk to the business. Introduce your management team to your financial institution, and be sure that all critical service providers understand your organization, including legal counsel, brokers, etc. In addition to mitigating the risk of concentrated knowledge, connected teams usually work more quickly and effectively.

Just as your lender should know your full team, ensure that you have a relationship with your financial institution that extends beyond your primary loan officer. The financial services industry sees frequent mergers and acquisitions, which can result in upheavals to the composition of a lending team. You do not want to find yourself having to start over should your financial institution experience a sudden overhaul. Ask to work with multiple team members so you understand all the options available to you, and do not get left out in the cold if your dedicated loan officer leaves.

It is also beneficial to work with multiple financial institutions, assuming you have not entered into any covenants that preclude you from taking on debt with another entity. Many financial institutions have specialty focuses, so while the entity that you started out with may have been the perfect option for securing a commercial real estate lease, they may not be in the best position to work with you on obtaining an asset-based line of credit or assisting with a Small Business Administration-eligible product. Understand what you need and make sure you align yourself with the right lenders to get the best product options and pricing.

Stay Engaged

Create networking opportunities for your financial institution, and expect the same of them. Let them know your needs, and ask if they have any business customers that could be of value to your organization. Remember, every business is a relationship business. Hopefully this will never change.

Explore All Available Resources

Your bank may be able to help you identify loan or grant programs, determine eligibility, and support you through the application process. Also, do not hesitate to explore new terms for your current debt obligations. The terms you received at the inception of your loan may not reflect the current market rates. Your lender would much rather redo your deal than lose you to a competitor. There is no harm in being the squeaky wheel, and you may be surprised in the options available to you.

Financial institutions are vital partners to organizations, so it is critical that you make the relationship as beneficial and advantageous as possible. You may be surprised at the new benefits you can reap from improved communication, broader connections, and more intentional engagement.  

Barry M. Pelagatti, CPA, is a partner in the audit services group of RKL, managing partner of the firm’s Exton office, and leader of its financial services industry group. He can be reached at

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