Just like people, businesses and financial institutions prefer developing relationships with individuals or organizations they trust. When determining whom to trust, these institutions place faith in the recommendations of other, similar businesses or institutions. The financial reference letter is one way of obtaining such a recommendation. Banks and other financial institutions throughout the world provide financial reference letters to clients upon request.
Bank Reference Letter
A financial reference works much like a standard personal reference letter but speaks to your financial reputation and history. More commonly known as a bank reference letter, these documents contain information about your history and relationship with your bank. Bank reference letters speak to your financial responsibility and stability and demonstrate your ability to maintain a healthy, working relationship with a financial institution. In some instances, a Citibank reference letter may contain information on your account balances.
Basics of the Letter
Bank reference letters must be written on the letterhead of the institution providing the letter. A financial reference letter provided to you by your bank contains your name and the name of any business aegis under which you operate. A bank official signs the document and provides an official seal. All other information, such as the nature of your relationship with the bank and any specific information about your account balances, can vary – different banks follow different formats when creating these letters.
Purpose of the Letter
Financial reference letters serve as forms of formal introduction and vouchers as to your financial situation. Some bond companies require an account satisfactory letter from a bank before agreeing to do business with prospective clients, as do financial institutions in other countries. These letters also validate your identity, testifying that you come to an institution with legitimate business. A Swiss bank, for instance, may require a financial reference letter, as may companies dealing in offshore accounts or business. These letters apply to companies as well as individuals.
Obtaining a Financial Reference Letter
The process of obtaining a financial reference letter depends upon the institution providing the letter. Some institutions maintain an official process or a form you must file, while others require you only to contact the institution and request such a form. Generally, banks only provide reference letters if you are a client in good standing – if a bank maintains a contentious or unprofitable relationship with you, no incentive for providing such a letter exists.