A letter of good standing from a bank is issued after the customer requests one.
Typically, the individual requesting the letter is looking for a formal document that confirms their existing banking relationship and demonstrates their financial position.
In short, a letter of good standing is similar to a bank reference letter, though it typically includes more specific information, depending on the reason the letter is needed.
In this article, we’re going to explain letters of good standing in more detail, how to get one process, and the differences between personal and business letters of good standing.
Feel free to use the table of contents to skip ahead to the topics most relevant to you:
Table of Contents
- What is a Bank Letter of Good Standing?
- How Do I Get a Bank Reference Letter?
- Do Business & Personal Good Standing Letters Differ?
What is a Bank Letter of Good Standing?
As mentioned, a letter of good standing is used to confirm the existing relationship between a bank and a customer.
The customer requesting the letter can either hold a personal account or be the representative of a business with an account at the bank.
In most cases, letters of good standing are requested by financial institutions looking to confirm that they can trust an individual or business that they are considering onboarding or servicing.
In other words, the letter of good standing takes the shape of a recommendation letter, but from a financial institution.
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What Info is Required in a Letter of Good Standing?
In almost all cases, a letter of good standing should be printed on the bank’s letterhead unless otherwise stated by the recipient.
In terms of the contents of the letter, this will ultimately depend on the recipient and what the sending bank is willing (or able) to share.
In short, the letter’s purpose and what has been requested by the recipient should determine the content.
However, some key information should be present in the letter, including:
- Legal name of the account holder
- Address of the account holder
- Personal identification number (e.g. passport number)
- Length of banking relationship
- Type of account held with the bank
- Average balance on account (depending on the purpose)
In addition to the information relating to the account holder, a letter of good standing should also include the following bank information:
- Name of the issuing bank
- Location of the branch
- Date that the letter was issued
- Contact information of the official issuing the letter
It’s important to note that the individual, business, or financial institution requesting a letter of good standing may have specific requirements. So, be sure to confirm what information they are looking for before requesting the letter.
How Do I Get a Bank Reference Letter?
The process of obtaining the letter from the bank would depend on the bank providing the letter.
For example, certain banks may require filling out specific forms, contacting account managers, sending a requesting email, or physically visiting the branch where your account is held.
Additionally, it’s important to bear in mind that banks only provide these letters if you are a client in good standing.
Do Business & Personal Good Standing Letters Differ?
Businesses and individuals can request a letter of good standing from any bank where they hold accounts.
That said, there are some differences in terms of the content that is included in a personal letter vs a business letter of good standing.
In general, these differences relate to the additional information that is required to verify the corporate identity, such as address, corporate tax number, business products and services used, etc.
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