How to have a good relationship with your bank

How to have a good relationship with your bank

Welcome and lets get Into the Lender’s Mind, your front-row seat into how lenders think, assess, and make decisions.

If you’re a business owner or entrepreneur seeking funding, there’s no better place to start than your bank. Your bank account doesn’t just manage your money, it builds your reputation. Whether you’re planning to borrow now or in the future, how you treat your account today plays a major role in whether lenders say “yes” tomorrow.

Let me show you the habits that make lenders feel confident and the red flags that raise concern.

1. Don’t go overdrawn, not even briefly

Your bank records everything, including how often and how long you’re in overdraft, especially the unauthorised one. Even if you go into the red for just a few hours and correct it the same day, it still gets noted.

👉 Pro tip: Always move money the day before you need it. Transferring funds in the morning won’t guarantee you avoid a negative balance overnight. That brief overdrawn period might not matter to you, but it does to your lender.

Having the account frequent or prolonged overdrawn can signal poor planning or inconsistent income, both of which reduce your creditworthiness.

2. Use your arranged overdraft wisely

Overdrafts are designed as short-term support, not as permanent cash flow tools.

If you’re constantly maxed out, it suggests your business isn’t generating enough surplus to operate independently. Lenders will ask: What happens if costs rise or income dips even slightly?

Having access to an overdraft is fine. But relying on it as your financial lifeline is a red flag.

3. Maintain a safety buffer

One of the best ways to earn trust from a lender? Show that you’ve got a cushion.

This doesn’t mean you need to have six figures sitting untouched. But maintaining a steady, positive balance or holding savings in a linked account demonstrates healthy financial discipline and risk awareness.

A lender wants to know: If things go wrong, do you have a fallback?

No, the overdraft doesn’t count.

4. Keep your main banking with the bank you borrow from

It may feel strategic to spread your banking across different providers, but when it comes to borrowing, it can backfire.

Lenders assess you based on what they see. If your main account is with another bank, the one assessing your loan can’t see your full income and outgoings, regular payments, or real-time cash flow. That lack of visibility can make them hesitant to lend or result in a lower offer.

When your main banking relationship is with your lender, they’re in a better position to understand and support your business.

Your borrowing pricing hangs heavily on

-          years with the bank

-          total existing debt

-          current account performance (turn over, days in credit, overdraft usage, any loan missed payments – like returned payments when there aren’t enough funds available)

5. Your bank knows more than you think

It’s easy to assume that if you haven’t disclosed something, your bank won’t know. But lenders are plugged into credit reporting systems and cross-reference your profile regularly.

That means they may be aware of:

• Asset finance arrangements
• Capital injections into the business
• HMRC repayment plans or arrears
• Other loans or facilities in your business has

These affect your overall affordability. If your accounts don’t reflect the full picture, it can lead to questions or, worse, automatic declines.

Being upfront and organised about your external commitments helps lenders trust your management approach.

6. Always provide to the bank the documentation required

Lenders depend on up-to-date documentation to assess your creditworthiness. Delays here can stall or even block your loan request.

If you have a debt with the bank, make sure you regularly provide:

• Annual financial accounts or management accounts
• Ongoing KYC (Know Your Customer) documentation
• HMRC and trading information (e.g. VAT returns, tax status)
• Tenancy schedules if you own or lease commercial property

Having this information up to date and on file can significantly speed up the approval process. If it’s missing or out of date, you risk unnecessary delays or even being declined purely on admin grounds.

Final Thought

Think of your account like your CV, always under review. The stronger the financial habits, the stronger your story.

In the next issue of Into the Lender’s Mind, we’ll explore what your financial statements reveal and how to make them speak a lender’s language.

Until then, keep your balance in check and your story strong.

💡 Need help preparing your business for funding? Let’s talk.