I have previously written about the importance of maintaining good banking relationships. The recent Covid-19 emergency financing reinforces this need. As of today, April 16, 2020 the program is out of money unless the government agrees to additional funding. Millions of applications were filed under this program. Many will not receive funding. Those that will are companies that have very good banking relationships. Their bankers made it a priority to get these loans approved. A friend of mine is a senior executive with a regional bank. Their staff worked through the Easter weekend to process loans – ultimately 6000 loans worth $1.2 billion will be funded. Anecdotally, I know of many who applied and were not processed. Why? The importance of the relationship. These PPP loans are 100% guaranteed by the government, meaning the banks will not suffer any losses. Much is being made currently about the “Main Street Loan” program. These loans require the banks share 5% of the risk. The effect of this requirement will be that these loans will be made to borrowers with whom the bank has good relationships. Good luck to those who don’t.