Is It Time to “Define the Relationship” With Your Banker?

4 min read • Apr 11, 2014 • Ty Kiisel

When I was a young single guy we didn’t call it the dreaded DTR (Define the Relationship), but eventually, any girl I had dated for any length of time wanted to know if our “relationship” was going anywhere. And, I have to admit, there were a couple of particularly cute young ladies I’d fallen for that just didn’t feel the same about me.

I dated a lot of very nice girls, but none so fine as the one I convinced to marry me over 30 years ago. I guess you could say that DTR was pretty “well defined.”

Getting to know your banker is a little like dating before you’re married. Some times it can turn into a very long-term relationship as many small businesses stay with the same bank and banker for many years. It’s also not uncommon for banking relationships to also fall apart as time passes.

In a random survey we recently conducted with visitors to Lendio from September 2013 to December 2013, 74 percent of respondents said they were willing to switch banks to get a business loan—putting accounts like deposits, credit cards, and merchant accounts at risk. So if you’re feeling like your current banking relationship leaves you unfulfilled, it doesn’t look like you’re alone.

Earlier this year I spoke with Matt Brinton of Elase Medical Spa about how he and his wife went about funding their business. Like many small businesses trying to grow over the last few years, they had to get creative in how they approached raising capital. One of the things he suggested is very relevant to our discussion today. He found the most success looking for a small business loan where he’d fostered the best relationships. He argues it’s up to you to give the lender a reason to look at more than your credit score and annual revenues. “If all they look at is the numbers, you dropped the ball,” he says.

Unfortunately, as demonstrated by the number of small business owners willing to abandon their current banking relationship for a small business loan, despite the billboards, it would appear that a lot of bankers don’t really know how to build a relationship—so, depending on the banker, it might be up to you.

I wish I could tell you there was an easy way to do it. There isn’t. Sometimes you just need to walk into your bank and introduce yourself. Be ready to tell them about your business and how you want to create a good working relationship with him or her. Not only will it be a good way to evaluate whether or not you even want to have a relationship, it could be a great catalyst for helping you meet future financial needs. I agree with Brinton when he suggests you need to give the banker (or any small business lender) a reason to look at more than your credit score, etc. A good working relationship with your banker is a great place to start.

There are as many opinions about how to build a good relationship with your banker as there are bankers. I like what Mitch Hurley, formerly a Vice President at First Security Bank of Utah, used to call the Three Ts:

  1. Talk: Communication is critical for any relationship to thrive. Have you ever had a spouse or close friend say something like, “Talk to me.” I’m ashamed to admit if I’ve been “focused” on work or some other distraction, I sometimes need to be reminded that communication is important. The same is true regarding your relationship with your banker. The conversations need to be frank and regular.
  2. Time: Nothing happens overnight. It took a while for my wife to realize that I was awesome, just like it might take you and your banker time to build a strong relationship. Don’t force things and don’t assume that simply because you’re a customer at the bank, the banker is going to love you instantly. Don’t rush things. Take your time.
  3. Trust: Honest Communication + Time = Trust. Trust is the foundation of any worthwhile relationship. I suggest you spend the same time and energy with your banker as you spend creating these types of relationships with your vendors and customers.

There is no guarantee this will help you get the small business loan you’re looking for today, but in my experience, a good relationship with your banker and an understanding of how credit works will help you in the long run. Brinton attributes much of his success working with local lenders to the time he spent developing positive relationships.

Your banker might not make the first move, but most will appreciate your efforts to initiate a good working relationship. It might sound one-sided, but if your banker trusts your character, knows you are credible, and you’ve spent the time to build a good working relationship, you might find yourself on the receiving end of a small business loan.


Ty Kiisel

Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon.