Banking · June 26, 2020

How Relationship Banking Benefits Your Business

Business is built on relationships. No matter the size of your company, you conduct business with other people, whether they're customers, vendors or partners.

The same principle applies to your business's financial life, and that's where relationship banking comes in. By forming a strong relationship with your banker, you'll be able to take advantage of the powerful but often overlooked benefits of financial institutions.


Benefits of relationship banking

Relationship banking is exactly what it sounds like—an individual or business owner building a trusted, long-term relationship with their banking institution, usually directly through a specific banker or account officer. This high-touch personal service gives you access to comprehensive solutions your bank offers. This might include loans, lines of credit, credit cards, insurance or safety deposit boxes. Your bank might also provide business services, such as payroll process and automatic payments, or international services like letters of credit.

Relationship banking also includes strategic advice from an experienced banker, who has a vested interest in seeing your business meet its goals.

For example, if you run a seasonal business or experience inventory fluctuations, your relationship banker can offer tools and strategies for managing cash flow during those cyclical variations. By getting to know your businesses and accounts, your banker can become a trusted partner who can make recommendations on products and services.

A relationship banker can also help you think proactively about reaching your longer-term goals. If you're planning to expand internationally, they can identify key investments to make and partnerships to form in the months leading up. They can work with you on a strategy for exiting the business or transitioning it to a partner or your child when the time comes. And if you need help managing personal wealth, your business banker can pair you with your bank's wealth management division and make sure the two strategies align.

A bank's center of influence

Banks embedded in the local community can help you build relationships with other businesses, community organizations and even potential customers. Banks are experts in the local economy and have connections throughout the entire community.

Need materials printed for an upcoming trade show? What about a designer who can create logos and graphics? Maybe you need an attorney to file a trademark application. There's a good chance your banker has recommendations. And with their robust network of business and community contacts, your relationship banker is the ideal person to recommend your business to others.

As your company grows, your banking needs will grow, too. Having a relationship banker as an ally can help save you money through lower fees on bank products such as checking accounts or credit cards. Their insight may also help you consolidate redundant accounts.

A relationship banker will also get to know the details of your business. They can also advocate for you when you seek a loan, helping you find better rates or more favorable terms.

How to build a relationship with your bank

Like all good relationships, building a banking partnership takes time. It typically starts with opening an account, but that's just the beginning of what a relationship banker can offer.

Be proactive and seek out your banker's advice every step of the way. Ask them about the products and services their bank offers and how they align with your business and financial plans. Be open and transparent with all the details of your business. The best way to leverage relationship banking benefits is to provide a complete picture of your business, including any challenges you're facing.

Set up regular strategy sessions to discuss your near-, mid-term and long-term goals and how your financial institution can help meet them.

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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.