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How to Determine If a Potential Customer is a Good Fit for Your Bank

You’ve met with a potential customer to discuss their business, ask questions, and get a sense of their needs. The all-important next step is qualifying whether you would actually like to move forward with the lending relationship. But how do you determine if it makes sense to add this business to your portfolio? 

Get to know the industry  

Before you can evaluate if a potential customer is a good fit for your bank, you will first need a clear understanding of that customer’s industry. A furniture manufacturer, a tech startup, and a car dealership aren’t going to have the same indicators of financial health nor will they have the same needs. You’ll take a deep dive into industry trends, including performance over the last few years and expectations for the next few years as well as key drivers of performance. Researching a customer’s industry and its unique needs will give you the proper context to evaluate a potential customer. For example, high accounts receivable on the balance sheet in one industry may indicate a poor collections process, yet it may be perfectly normal in another industry. 

Compare a potential customer to its peers 

Once you understand the big picture of a potential customer’s industry, you’re better prepared to compare its financials to peers in the industry. This will give you insight into the lending opportunities for this customer. However, if this is a new industry for your bank, it will also give you additional insight into whether or not this customer is in an industry that you and your institution are comfortable with in the first place. You may also come away from a peer comparison with additional questions for the potential customer, since there may be good reasons for the differences.  

Review the company’s management 

Evaluating a potential customer's management team is another important part of determining the overall financial stability of the business. You’ll want an understanding of their strategic vision for the company and plans for growth. But you’ll also want to feel confident in their ability to execute their strategy. Does the management team have a track record of success in their industry? Do they have the demonstrated ability to make sound decisions and adapt to changing market conditions? This is another area where you can compare your potential customer to its peers to see how its management team stacks up. 

Determine their ‘cultural fit’ 

While you are still learning about your potential customer, you’re already an expert in your bank. If all other factors are lining up, another dimension to explore is whether or not this potential customer’s values, culture, and mission fit with those of your bank. For example, if green banking and sustainable finance are at the forefront of your bank’s mission, there may be certain customers that conflict with those values. 

Another way to establish trust 

No one can be an expert in everything. So it is important to use every tool and resource available to prove to your customers that you have the expertise to add value to the relationship and support them as they work to achieve their goals.  If you are informed about a potential customer’s industry, you’re not only more prepared to evaluate their business – you’re also demonstrating your ability to provide them with excellent service.  

Realistically, a loan from Bank A isn’t going to look very different from a loan from Bank B. Where the customer can see a difference, however, is in how much they feel they can trust their lender to make recommendations that are truly in the best interest of the customer.   





With a background in funding, Associate Product Manager, Kate Perniciaro, prides herself on helping clients reach their potential. Before joining the RMA team, she held the position of director for a business loan entity where she assisted businesses of all sizes with lucrative and affordable funding solutions. She is currently at the helm of RMA’s eMentor product and takes an active role in guiding banking teams to bolster their knowledge and reach their potential. Kate holds a B.A. in Psychology with a minor in Sustainability Studies from Stony Brook.  

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