Relationships Matter

2015-12-18T12:11:32-05:00 October 26th, 2015|Tags: |0 Comments

As I was departing the banking industry in the 1990s, many banks began centralizing loan decisions, far from where the loans originated. Instead of relationship-oriented, lending became transactional, with decisions based on credit scores, void of any relational element.

Instinctively, I knew that having a relationship with the borrower had a better likelihood of the loan being repaid than a transactional approach.

According to a Wall Street Journal article, based on Dr. DeYoung’s research, my instincts were correct. He discovered that Small Business Administration loans based on credit scoring, rather than traditional relational approaches, went unpaid 23% more frequently!

Proverbs 18:24 says, “One who has unreliable friends soon comes to ruin, but there is a friend who sticks closer than a brother.”

Whether it’s loaning money or selling products, relationships produces better results!

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