How to Build a Relationship with Your Bank or Lender

Sep 19, 2022

If you own a small business, you’ve probably heard business support organizations in your community talk about how important it is to have a relationship with your lender or your bank. But when you walk into a branch, there are a couple of tellers at the counter, and you don’t know where to find the right people to talk to. 

What does having a relationship with your small business lender actually look like? Why is it important? And most importantly, how do you make it happen?

This information is presented by Lendistry and the National Bankers Association’s Innovation Council to provide real answers and help small business owners skip steps toward success.

Why are relationships with financial institutions important?

Think about your journey through school. You started with the basics, then worked your way up the levels as you gained knowledge. Small business lending has a similar journey. You may just start with a business account at a bank, but as the business grows, you may need a business credit card, then a small term loan or SBA loan, then a larger loan or line of credit

If you have a history at a particular bank or non-bank lender, progressing through those steps becomes easier. You also have someone to answer questions and give advice about what kind of financial products are the best fit to meet your goals, whether you need an infusion of working capital, or to refinance business debt, purchase equipment or expand your business. Not all banks and lenders offer the same financial products, so it’s important to have someone to speak to so you can understand what your needs may be down the line. They can also give you guidance about what kinds of financial documents you will need to prepare.

Melanee Woodard, VP of Marketing at Industrial Bank, stresses that in her experience, “When they have a trusting relationship, our customers tend to follow branch managers when they change branches. They want to stay with someone they know and who understands their business.” A great customer relations professional can help small business owners identify when they’re ready for a loan, “and if they’re not ready for a loan, they can tell the business owner ‘not no, but not now’ and identify the steps they need to take to get an approval.”

Where do you find the right person, bank, or lender?

One simple way to identify the person you want to speak to is to look at their title. A teller at a bank doesn’t have the knowledge you’re looking for, and turnover with tellers tends to be higher. Melanee Woodard suggests, “You’re looking for someone with ‘business development’ in their title, like a Business Development Officer or Business Development Representative. At a bank, a branch manager or customer relations manager may also be a good fit.”

These individuals may not be at a branch all the time, or you may not have a branch in your community. The surge of online lenders and fintechs also means there are fewer places to go to speak to a human. But business development professionals also have the goal of meeting small business owners like you, so they are often found in places where they’ll be easy for a business owner to find. If you attend events in your area that are meant for small businesses, like expos, information sessions, and networking events, they’ll be there, especially if the lender or bank is a sponsor of the event.

If they’re not out in the community in this way, to be perfectly frank, that may be a signal that a different lender or bank may serve you better. It’s important to learn this early, because forming a positive relationship starts with making sure you’ve chosen the right institution.

How do you know a lender is right for you?

Your relationship is with more than a person who works for the bank or lender, it’s with the institution as well. If you choose a lender that can stick with you from early days to long-term, you won’t have to start from scratch every time you’re ready for the next step forward in your journey. 

Is your lender:

  • Active in your community: Do you see their name or logo on community events?
  • Offering a variety of financial products that can serve you as you grow?
  • Using technology, like an online application, along with their team of real people?

What does technology have to do with relationships?

It’s important to acknowledge that the way people handle their finances is evolving quickly. Technology has a reputation for being impersonal, but sometimes it’s the perfect tool for access to capital. It enhances the relationship, because the institution you have the relationship with is easier to reach, and can do more for you. 

“We knew decades ago that people didn’t want to go into a bank branch. Your kids or grandkids may never go into a bank branch. We need to meet the customers where they’re at.”

– Everett K. Sands, Lendistry CEO at LEND360 2022 

For example, if you can submit all required documents on a secure portal and use an online system to sign documents, you don’t have to go into a branch during business hours to complete a loan application. This is a great benefit, because most small business owners are busy running their businesses during the day.

When you take the time to choose the right lender or bank, and you are proactive in nurturing the relationship, your business has a strong partner and greater financial flexibility.