Bank relationships matter

In the current economic climate, many small businesses face difficulties when applying for loans. However, the process may vary depending on the business' previous relationships with financial institutions. In a recent study, Tansel Yilmazer, assistant professor in the MU Department of Personal Financial Planning, found that relationships between small businesses and financial institutions affect both the borrower's decision to apply for a loan when in need, and whether the institution approves the loan. The impact of relationships on loan rates, however, varies with the economic climate.

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