Bank Reference Question

[Anonymous]

Hi, I have a few questions regarding bank references. My business is 4 years old and recently when applying for credit I have been asked on several occasions to provide a bank reference.

What information does a bank reference contain? Does it show them my balance? Does it tell them how many "figures" I have?

Also, who do I list as the "bank contact"? - - I am a small LLC with a normal business account at Chase, there isn't really a contact per say. I don't have a personal banker like large corporations do.

The reason I am asking all of this is because over the past year I have been socking away cash in my checking account (at a crappy 0%) so that my bank references would look good. Ideally I would like to start moving some of it into savings and start earning some interest. It seems that all the vendors I have will only accept checking accounts for references...not savings accounts. So I am trying to figure out how much cash to keep in checking to stay a good reference.

Thanks!

- Eric

[Anonymous]

Hi, EJ360Tech!

This would be an ideal time to visit with an officer or manager of your bank and ask him/her these questions. That manager can give you specific answers for your situation.

If you deal with a lot of cash sales, you're probably a familiar face inside of the bank, so this should be easy for you.

If you're pretty much an online or night deposit type of business, dealing with CC batch transactions, etc., for deposits, make it a point to go into that branch for some personal attention once in a while.  Chatting up the branch manager never hurts.

I'd suggest checking on your Experian and DNB business reports, too.  A D-U-N-S number can help you, a lot.

Sounds as if most of these vendors are smaller ones.  They just want to make sure you've got some cash to pay those invoices.  You can always ask them what they feel is an acceptable level of demand deposit funds, too.  They may just give you a number, and then you'll know.

References may include the name of the individual verifying your account at the bank, length of time you've had the account, number of bounced checks, and a range of current balance, such as "low 5 figures", or some such.

Hope this helped a bit, but I think you'll be better informed if you ask the banker and the vendors these same questions directly.

Good luck with everything!