Borrower Best Practices: Tips for Financial Advisors

Banks prefer working with borrowers who behave well. As a financial advisor, building a good relationship with your bank partner is crucial for maintaining good credit ratings, ensuring the health of the loan, and developing a partnership for potential future acquisitions. At SkyView, we have a vast network of regional and community bank partners who are well-versed and experienced in lending to the wealth management industry for mergers, acquisitions, and debt restructures.

Some ways that financial advisors can ensure the most success with their bank partner is to follow borrower best practices:

1. Be prepared with the requisite documentation required by your lending partner

To ensure a smooth and efficient loan process, it is essential to promptly provide all documentation required by your lending partner. This documentation may include the following:

  • Financials (Quarterly)
    • P&L
    • Balance Sheet
    • Revenue Reports
  • Valuation (Annual)
  • Tax returns (Annual)
    • Completed tax returns or notice of extensions
  • Review/Notification (in advance of):
    • Non-bank financed transactions
    • Sale of assets
    • Junior partner buy-ins 
  • Review of acquisition pipeline (Semi-annual)
  • Discussion of distributions vs. debt paydown (Annual)

2. Be timely with your payments

Making timely payments is crucial for maintaining a healthy relationship with your bank partner. Late payments can harm your credit rating and negatively impact your chances of securing future loans. By staying on top of your payment schedule, you can demonstrate your commitment to responsible borrowing.

3. Be transparent with your bank partner

Transparency is key to building a solid partnership with your bank. Be upfront and honest about your financial situation, including any potential risks or challenges you are facing. By being transparent, you can work together with your bank partner to develop solutions and mitigate potential risks.

4. Use your bank partner as a lending advisor/consultant

Your bank partner can provide valuable advice and guidance, so do not hesitate to use them as a resource. They are invested in you being a successful borrower.

By following these best practices, borrowers can establish a successful relationship with their bank partner.

For more information on Borrower Best Practices, listen to our Borrower Briefing – Borrower Best Practices podcast

At SkyView, we’re committed to helping financial advisors navigate the complex lending landscape and secure the financing they need to grow their practice. Contact us today or schedule a consultation to learn more about our lending solutions for the wealth management industry.

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