I Need A Loan

Where should I go to borrow Money?

My best advice is to start where you are already known, preferably where you have an existing banking relationship, provided it is a “healthy” bank (See my pevious post on finding a “healthy” bank that is hungry.). If you do not want or refuse to go back to the cowardly bank officer who you need to leave or have just left, take your time and be prepared to turn over a lot of heavy stones. Look all around you for any connection you might have with another bank…school buddy, neighbors, church, social group, or friends. Some connection/recommendation is better than nothing and right now we need all the tricks in the book. Many banks, but not all, are reserving their limited lending capacity for their good customers and are not seeking new clients at this time. Besides, looking for a new bank is a lot like the “dating” game and the ”vetting” process is often long, awkward and may involve several/many banks. You need to find a good personality match as your banker is your “salesman” who takes your case, if they think it is acceptable, to the “Senior Car Sales Manager” (a/k/a loan committee). Today’s loan officers usually have a nominal pre-approved amount they can lend and an unlimited amount they can turn down, which makes them basically useless. They understand that a bad loan is a reflection on them and often affects their promotion chances and/or job security, especially in today’s environment. Fear of missing an important detail about the credit request, especially if it is a negative one, keeps many business lenders awake at night and delays them sending your loan request up the ladder to be reviewed by the Senior Credit Underwriter. (This underwriting position, depending upon the banks old policies, was either re-created or shined up and given a place of importance in the New Banking Game.) Many times, your sole representative will be that loan officer you just met and it is your job to fully explain the who/what/whys of your business. The person you deal with will most likely not make the decision; the person/committee who makes the decision will probably never meet you or know anything else about you or your business ideas unless it is in the loan package. (Get to know their boss and any members of that committee if possible.) Now you understand the importance of that connection. If the size of your request is within their approved limits, your work is half finished. Remember one important rule, however, that no matter how big or how small your request is, ALWAYS EXECT THAT YOU AND YOUR BUSINESS’S DIRTY LAUNDRY WILL BE THOROUGHLY AIRED. Always bring up the negatives somewhere in the conversation (preferably after the positives) and be prepared to fully address these items. Five years ago, they may have been overlooked, but not today. A cardinal rule is that a resolved problem is infinitely better than an unresolved problem.


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