For small and medium-sized enterprises (SMEs), a single bank is often sufficient as long as operations run smoothly. However, as soon as a need for a quick decision or financing arises, or disruptions occur, it becomes clear that relying on just one option is not always safe.

Dovilė Bansevičienė, Chief Business Banking Officer at SME Bank, discusses in the Lrytas.lt article when one bank is no longer enough and what warning signs businesses frequently overlook.

When is one bank no longer enough?

In business practice, several situations serve as warnings that it is time to review the structure of your banking relationships.

“The first and most obvious signal is operational dependency. If technical disruptions at your primary bank freeze your company’s payments to suppliers or partners, it means your concentration risk is too high,” says Bansevičienė.

She emphasizes that business continuity should not depend on the stability of a single financial institution.

The second signal is a weak bargaining position. “By working with only one bank, a business cannot compare real conditions – neither interest rates nor commissions. Promotional offers and actual terms often differ, and without an alternative, there is simply no ground for negotiation,” says the speaker.

The third involves obstacles when trying to finance growth. “When the primary bank refuses to finance expansion or the offered credit limit does not meet business needs, the lack of an alternative banking relationship significantly complicates the search for a solution and wastes valuable time.”

The fourth signal is the unutilized fund potential. “Current account balances are ‘sleeping,’ and the bank either pays no interest or applies it only to extremely large amounts. There are solutions in the market that allow short-term cash flows to generate additional returns without liquidity restrictions.”

Finally, a lack of market awareness. As the Chief Business Banking Officer at SME Bank notes, 19 banks operate in Lithuania today, and the financial market has become a competitive ecosystem. A business that has never compared terms simply does not know what it is overpaying for.

In summary, when a single-bank solution can halt operations, limit growth, or cost more than the market average, diversification becomes a financial management necessity rather than an added comfort.

What do alternative banks offer?

If a business model is non-standard, speed is critical, collateral is lacking, there is idle cash in the account, or a business simply wants personal attention, cookie-cutter offers do not help. In such situations, businesses increasingly look for more flexible banking solutions.

“Speed is one of our greatest advantages. A business account can be opened in a single day, and a loan offer can be received within 24 hours,” says Bansevičienė. This fundamentally changes the game for companies that need to react swiftly to market opportunities or short-term liquidity needs.

“We also offer microfinancing solutions starting from EUR 30,000. Such solutions are particularly relevant for small businesses that often lack sufficient collateral. This opens up financing opportunities where a traditional bank would typically say ‘no’,” states the speaker.

All these features become even more relevant when a business model is non-standard. In such cases, it pays to trust a bank that looks for ways to grant financing and help the business grow, rather than finding reasons not to.

An equally pressing question for businesses is how to effectively put idle funds in their accounts to work.

“SME Bank’s product Night+ helps achieve this. It allows businesses to earn up to 2% annual interest on their current account balance without freezing it – the funds remain unfrozen, and the business can use them at any time.”

According to Bansevičienė, this is highly relevant for businesses whose accounts regularly hold larger sums overnight.

“The account balance is recorded every evening – if it exceeds EUR 10,000, interest is calculated on the entire amount. This happens daily, and the accumulated sum is returned to the client’s same account.”

Crucially, the funds are not locked away; the business can access them at any moment. This is not a fixed-term deposit. “The business’s money is not ‘sleeping’; it is working. That is why we say our clients move into the black overnight by working with us,” she says.

The human connection is no less important, especially when a business needs quick answers or tailored solutions.

“The bank assigns a project manager to every small and medium-sized business client. This manager understands the company’s situation, can offer advice, and help solve problems – and they can be reached with a simple phone call. In non-standard situations, this can make a decisive difference,” the expert emphasizes.

“Invisible” losses for business – among the most painful

A portion of small and medium-sized business losses does not appear on balance sheets or invoices – they accumulate unnoticed through missed opportunities, uninvested funds, and inefficient financial decisions.

One of the largest yet most frequently overlooked losses is cash held in current accounts that generates zero return. Because it is not a direct expense, many businesses do not even view it as a loss.

“At the end of 2025, Lithuanian companies held EUR 11.142 billion in financial institutions, of which as much as EUR 9.293 billion – about 83% – was in current accounts. This means the vast majority of business money simply stays overnight without generating any return,” notes Bansevičienė.

How much does this cost in concrete terms?

“It is estimated that if businesses received even a half-percent annual interest on these funds, they would collectively boost their budgets by roughly EUR 46 million per year. By doing nothing, this money simply depreciates,” warns the expert.

Such situations are usually driven by psychological and informational reasons rather than economic ones – many businesses still view fixed-term deposits as inconvenient and restrictive to their flexibility.

“The prevailing mindset is that a deposit is a long-term and complex commitment. Some businesses with sufficient funds in their current accounts simply lack the motivation to put their money to work. Small and medium-sized enterprises avoid fixed-term deposits because breaking the agreement early means losing all accumulated interest – so liquidity is valued more than potential returns,” explains the speaker.

Another common issue is the inefficient management of working capital. SMEs often experience difficulties not because the business is unprofitable, but because real cash flows do not match “paper” profits.

“The balance sheets look decent, but there is no cash in the account – profit exists on paper, but not in reality,” says Bansevičienė.

Another often invisible loss is overpayment due to weaker bargaining power. Companies that work with only one bank and do not actively compare conditions frequently pay more for financial services than they need to.

“A business operating with just one bank and failing to compare rates simply pays more than it should – both for maintenance and in interest,” says the speaker.

According to Bansevičienė, Lithuanian businesses are becoming more mature and are increasingly evaluating not just direct expenses, but also missed opportunities.

“It is precisely the missed opportunities – unearned interest, unutilized financing programs, missed better rates – that make up the bulk of ‘invisible’ losses,” the expert states.

Financial inertia also stands in the way

Many businesses only reflect on their relationship with a bank when they need a quick decision, financing, or when disruptions hit. However, operating out of habit for too long can become one of the most expensive mistakes today.

“At an operational level, a business with only one bank effectively grants it a veto power over its business continuity. Technical issues, internal bank decisions, or additional checks can halt payments – and that is when it becomes clear there is no alternative,” says the expert.

The problem also manifests at a financial level. Businesses that do not compare conditions often fail to realize how much they are overpaying for services or how much potential return they are losing.

“Based on available data, Lithuanian companies keep about 83% of all their funds in current accounts – most of it generates no return and slowly loses value,” states Bansevičienė.

According to her, this becomes particularly risky when a business needs to finance growth.

“When your only bank refuses financing, the business finds itself in a weak negotiating position: there is no history with an alternative partner, no time to build one, and no choices available,” explains the speaker.

She notes that the biggest issue is that financial inertia does not look like a mistake for a long time.

“Until you need a fast or non-standard solution, everything seems to work. But when that time comes, the price can be disproportionately high: a lost contract, a stalled business, or financing that was needed yesterday.”

In practice, loyalty to a single bank often means paying more, knowing less, and having limited bargaining power.

“Today, with 19 banks operating in the market and financial decisions being made within 24 hours, such inertia is a conscious rejection of opportunities that already exist,” says Bansevičienė.

Regional businesses leave opportunities on the table

According to the SME Bank representative, regional businesses still dedicate too little attention to choosing a banking partner – and as a result, they often pay more in the long run.

“In many small and medium-sized enterprises, financial decisions are made by the owner, for whom daily operational issues naturally seem more important than analyzing banking terms. Because of this, businesses often do not even know if they are overpaying or if they are getting the best possible terms.”

According to the expert, it is regional businesses that most frequently lack fast decision-making, a broader financial perspective, and personal attention.

“When a company lacks a strong internal finance function, it is vital to have a partner that not only provides financing but also helps identify alternatives, manage cash flows more efficiently, and react quickly when a decision is needed now, not in a few weeks.”

Bansevičienė observes that some regional businesses still choose a bank simply because it has a physical branch in their town or district. However, modern banking has long moved beyond physical locations: a business can reach its manager with a single call or a few clicks.

A digital bank can deliver the majority of services with the same level of quality, and often faster than banks with physical branches.

“The biggest problem is that regional businesses often do not even know what opportunities they are missing out on. In the long run, this becomes one of the most expensive forms of ignorance,” the expert concludes.