In 2023, the need to grow deposit balances in an already competitive market is a primary focus for U.S. commercial banks. As lending activities surpassed deposit growth in 2022, loan-to-deposit ratios increased for 85% of more than 800 American commercial banks in 2022 highlighting the importance of expanding their deposit base to preserve liquidity. Fortunately for bankers, businesses can be a source for deposits, especially those in the growing middle market sector. Mid-market companies saw 12.2% revenue growth year-over-year in 2022, with 10% growth projected in 2023. For your financial institution, that continued growth can boost your deposit base and provide the opportunity for new long-term relationships.
So how do you find, and win, that business? Banks and credit unions looking to increase their business deposits need to do more than simply raise rates on savings accounts and hope that the business comes to them. A competitive rate alone will not drive a sticky relationship. The key to winning this business is to use several search factors to find companies that meet the scope of your financial institution’s deposit growth goals this coming year.
Here are five ways you can use RelPro to target your search and identify prospective companies to boost your deposit base and build your business:
While there isn’t a magic number of employees that guarantees a deposit-rich business, a company with more employees tends to indicate a company with positive cash flow. A consistent or growing employee count indicates the company is not only consistent with its payroll, but also may indicate it has excess free cash flow.
Using Form-5500 IRS filings, you can review the activity in a company’s employee benefits and retirement packages, including total assets, contributions and participants in retirement plans. The state of (and existence of) a company’s retirement plan offerings can provide a clearer picture of the overall health of a business and its finances.
A business that is still in its early stages may have to operate on thinner margins as they develop, which can limit cash. For start-ups that have recently gone through funding rounds or have received capital investments, deposits may be more readily available, though also quickly deployed to fund continued growth.
Reviewing a company’s UCC and loan filings indicates how much and how recently the company has borrowed, as well as the types of loans they may have, including whether they are term loans or revolving lines of credit. In addition to giving you insight into a company’s liquidity position, UCC filing data provides intel into where a company currently banks and has outstanding commitments.
On the other hand, searching for businesses without UCC or loan filings may uncover businesses that haven't needed, or sought, outside funding. A company with no outstanding debt may have more liquidity than a company that is reliant on financing.
It’s important to research the industry of a potential client, not only to gain an understanding for the business and its challenges, but also to identify historically cash-rich industries to narrow your target market.
Finding new business opportunities may not be easy, but it is crucial for continued growth. Knowing where and how to search for those opportunities is your first step. Identifying companies with consistent employee growth can turn you on to prospects with proven stability. Accessing benefit and retirement plan insights can give you a closer look at the health of a company. Reviewing funding rounds and loan filings tells you where a company gets its funding and how often it has needed additional funds. These insights, along with industry data, can support your bank’s efforts to identify potential new business opportunities that can help grow deposits at your institution now and build a deeper relationship for the future. Schedule a demo today to find out how you can leverage RelPro’s easy-to-use workflow to support your business development strategy.
Founded in 2009, RelPro’s Relationship Intelligence platform was built with the experience that there is no one nirvana source of B2B Company and Decision-Maker data – so why rely on one source of data? RelPro integrates data from best-in-class partners and the web to deliver a unique global database of over 7 million Companies and 150 million business decision-makers, allowing B2B Marketing, Business Development and Relationship Management professionals to quickly identify new prospects and close deals faster. RelPro includes automated Prospect Research to quickly inform business development outreach, and powerful Alerts that provide a call-to-action prompting timely interactions with prospects and clients.
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