Finding Money Advice

If your loan is approved and you’ve found a lender, don’t blow it. As with personal relationships, banking relationships aren’t built on one-time interactions, they require continual work. If things don’t go exactly as you plan somewhere down the road, a strong relationship with your lender can save your bacon. And a poor relationship will quickly change your fate. The Finding Money ebook has a long list of tips for maintaining a good relationship with your lender.

If your loan request is declined, it’s time to immediately shift into detective (not defensive) mode so that you can learn where you went wrong.

Find Out Why You Were Declined
Consider Professional Help

• Have had personal experience with most of the financing alternatives;
• Know lenders by name and thus can offer a personal introduction;
• Are respected by their peers so their referral carries some weight with potential lenders;
• Have a keen sense of what works and what doesn’t, and can quickly hone in on the possible homes for your deal;
• Have seen a wide variety of creative solutions to problems just like yours;
• Have valuable industry contacts that allow them to run your deal past potential lenders without formally submitting it;
• Can remove themselves from the personal side of a loan decline; and
• Can shepherd the deal for you so you can go back to running your business.

Try Other Lenders
Sharpen Your Loan Proposal
Reconsider Investment Capital
Reconsider Your Need
Go Back To Bootstrapping
Give It Up

But what if your loan request is approved and then things turn ugly? Sooner or later your plans may not go exactly as you expected, what then? How do you handle your banker? Well, in a word, carefully. First of all, you need to understand what lenders consider a problem because their definition might not be as liberal as yours. The ebook has a list of over thirty, so you’ll know what to watch for.

A phone call is probably sufficient if the problem is relatively minor and temporary. A face-to-face meeting is best if you’re delivering poor year-end numbers, or if the problem is severe. Don’t underestimate the importance of this meeting. How you deliver the news is almost as important as the news itself in determining how your lender will respond.  You need to try to be as positive, upbeat and in control as possible. Your positive attitude (assuming you can convince them you’re being honest and not blowing smoke) will go a long way toward calming your lenders fears. Go prepared to convince them that you understand the gravity of the situation and have viable solutions.

Lenders walk a very fine line in situations like these. If they overreact, by calling the loan or refusing to allow you room to maneuver, or if they’re too intimately involved in your management decisions, they run the risk of a lender liability suit. Such a suit could result in a finding that the bank is actually an investor and not a lender, and they could lose their priority over other lenders and investors. Expect their handling of you to be very formal and by the book.

If they think you may not be able to pay them, they’ll put their loan work-out group to work, only you probably won’t be told that directly. Secret: You can read the writing on the wall if they tell you they’re bringing out a new loan officer to meet you, and your old lender won’t take your phone calls. This new lender will be much more in-your-face than your first lender, and you’ll quickly sense a change in your relationship. The loan work-out group might more appropriately be called the loan get-out group, because their job is really to get their money back any way they can.

If you disagree with their approach, or if they won’t agree to yours, put everything in writing. At this point you’re probably teetering on the edge of voluntary or involuntary liquidation. Call in the best advisors you can find to help you understand the options. Plenty of businesses have made it through situations like these.