Banks put heavier emphasis on building relationships by ProQuest


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Banks put heavier emphasis on building relationships
Several insist customers seeking                                                       Banking                                    out the second loan, Specht said.                            ing increases safety and soundness.” While
loans have deposit accounts, too                                                                                                       But if a business needs cash, “you do                   Wachovia doesn’t make deposit accounts a
                                                                said one of his small-business clients recently                   what you have to do to keep the business afloat              hard-and-fast loan condition, “the bread-
            By BEtH FItzGERAlD                                  had his loan canceled by his bank because he                      and get the line of credit, and hope business                and-butter operating account of the business
WITH BANK CREDIT scarce during this reces-                      refused to open a business checking account.                      turns around and you can start to have some                  would be very often a condition” of offering
sion, businesses are under pressure to move                     The loan payments were being made in full and                     leverage and develop relationships with other                credit, Cole said.
their deposit accounts to the bank that agrees                  on time, he said.                                                 banks,” said Specht, a partner in Costantino,                     Jim Kocsi, New Jersey district director of
to give them a loan.                                                  “I’ve never seen this                                       Specht, Templeton & Co., in Secaucus.                        the Small Business Administration, said bor-
      Some say it’s nothing new: banks have                     before in 25 years” as a CPA,                                          At Wachovia, which was acquired by Wells                rowers aren’t required to move their accounts
long stressed “relationship banking,” where                     Evangelista said. “Today,                                         Fargo last year, “the idea of a full banking rela-           to an SBA bank in order to get an SBA loan.
the loan is just one piece of a partnership that                it’s not uncommon for the                                         tionship is not a new concept, but has been                       Kocsi said it’s generally a good idea for a
includes the client’s basic deposit accounts —                  bank to ask for everything.”                                      our philosophy for many years,” said John Cole,              small business to have more than one bank-
business checking, payroll, cash management                           CPA Carl Specht said                                        senior vice president of business banking. “It               ing relationship, as “you don’t want to have all
— and can extend to a suite of financial ser-                   one of his small-business                                         would be an exception to make a loan without                 your eggs in one basket.” But he’s not surprised
vices, from insurance to wealth management.                     clients already has a loan        John Cole                       having the full relationship that comes with it. We          banks try to capture all the deposit accounts
      But the credit crunch is also giving banks                with one bank, and applied for a credit line                      don’t believe we can offer a full solution that is           when they make a commercial loan. “In the
increased leverage to insist that business lend-                from another bank. Specht said the second                         credit only.” He said the borrower benefits from             common-sense world of banking, the bank’s
ing clients bring their deposit accounts along                  bank “came back and said, ‘We’ll extend you a                     having access to more financial tools, while the             point of view is, ‘Look, I’m taking care of you,
with them, according to experts.                                line of credit, but we want all your accounts.’”                  bank enjoys an increased deposit base.                       and the other bank isn’t — so why do you keep
      Ralph Evangelista, a CPA and partner in                   The client walked away “because they are in                            Cole said deposits “are a source of                     your money there?” u
Frazer, Evangelista & Co., in East Brunswick,                   good financial shape” and could manage with-                      liquidity for the bank, and deposit-gather-                                       E-mail to

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