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There’s No Better Time to Optimize Your Lending Relationship

Sep 28, 2021

As we head into the home stretch of 2021, people are eagerly looking to close deals before year-end and hit their budget targets. Lenders are no exception. Competition is fierce, which means there is opportunity. Here are a few things to consider to improve your capital structure, cost of funds and lending relationship, all directed at generating additional cash flow. These helpful hints can effectively enhance your organization’s market position.

When was the last time you reviewed your loan documents?

At a minimum, it should be every three or four years. Given the current market, now is an optimal time to review: 

  • Cost of funds
  • Covenants
  • Opportunities to increase the loan facility
  • Cash management opportunities

There is no better time to review than when you don’t need the money, rather than those hectic periods when you do need funds. Usually, it is worth looking at it once a year, especially with market conditions changing.  Opportunities exist if you know where to look—making it well worth the investment in time.

When was the last time you met with your lender?

Meeting with lenders should occur at least once or twice a year. But rarely is there proper follow through. Lenders have a pulse on what’s going on in the market, since they deal with a variety of businesses—perhaps some of your customers and suppliers. Make sure you have access to the appropriate people at the bank. Having access to those leaders who are the decision makers is an important aspect of the relationship. 

Are you considered a premium client?

Ask your lender what they really think of you and your company. This helps ensure that all of the stakeholders are on the same page. Get comfortable with the uncomfortable—it’s not such a bad thing. Open and honest conversations are critical. If there are issues or concerns, they can be addressed sooner rather than later. Nothing is worse than when you believe the relationship is great and the person on the other side of the table doesn’t feel the same way.


What are your and your business’s goals for the next three to five years. Discuss whether your lender, and other key stakeholders, can support those goals and execute on potential opportunities. More importantly, do they want to! For example, say you want to do an acquisition or two per year. You’ve identified one and are close to signing a letter of intent. But you determine the bank is not interested in financing your growth plans. Now it’s too late. Finishing a year and going into a new one with high expectations is an opportune time for that review.

Are All Your Concerns, Visions and Opportunities Being Considered?

While good customer service should be the rule, not the exception, sometimes that’s not the case. The bank may not know that you have an issue or concern unless you express it. So, let them know! Certainly, nobody wants to be considered a pest, but the business owner needs to be considered and counted. That’s why the best time for good planning is long before an issue escalates.

If you have concerns about your lending relationship, talk to one of your other trusted business advisors. They should be able to provide some valuable insight and guidance.  

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Robert D. Katz

Robert Katz CPA is a Managing Director of EisnerAmper Financial Advisory Services Group, and works with public and private companies, in and out of bankruptcy, to create and execute the strategy needed to restructure or improve operating performance.

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