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The
bank reference letter provides important information regarding your
relationship with primary lending and depository institutions. You will be
asked to provide a bank reference letter on an annual basis.
Please see that your banking officer addresses the following topics:
1. Indication of a revolving line of credit (if any) and amount
granted, currently in use, and length of time the line has been available.
The line of credit has proven to be extremely valuable to contractors
seeking surety support. Unsecured Lines or those secured by long term
equipment notes are best. Those secured by account receivables or CD's will
not augment working capital and should be avoided.
2. Existence of any outstanding notes, total outstanding loan
balances, and expected payoff date.
3. General figure regarding amounts maintained in depository
accounts.
4. Indication of the institution's satisfaction with the manner in
which accounts are handled.
Here is an example commonly used to satisfy bonding
company requirements. Please feel free to provide a copy of this page
to your banker for their use in preparation of the letter:
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CONTRACTOR's NATIONAL BANK |
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Address • City, State Zip • Phone# • Fax# |
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Dear Mr. Strange:
Example Construction Company, a valued customer of Contractor's
National Bank, asked that I provide you with information regarding our
relationship and credit accommodations here at the bank.
We currently have a $XXX,XXX revolving line of credit, of which $XXX,XXX
is available and a $XX,XXX equipment loan that reduces by $X,XXX
monthly. Example Construction Company maintains deposits in the bank
in excess of $XXX,XXX and handles all of his banking very
satisfactorily. Any accommodation you could afford him will be
appreciated.
If you have questions, please contact me.
Respectfully,
Officer Name
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