Up Your Business LLC

I recently asked a number of business owners, from a wide variety of industries and across the country, what they really wanted from their lenders/financial institution. There were no surprises in this list, pretty basic. However, in this season of recession, or even in times of plenty, are business owners receiving what they want from their lenders?
In their own words here is what they wanted and in no particular order:
1. Solvency/Financial stability of the financial institution
2. Ethics
3. Market Knowledge
4. Affordable Rates and competitive terms
5. Convenient Locations
6. Work as a partner rather than just as a lender
7. Not “meddle” too much into the business affairs (meddling is different from participating)
8. Show some patience during times of distress
9. Spot bad characters (customers likely to default) in their loan portfolios early and take appropriate action, go after the bad apples/characters but help me and the others of good character and who are trying even though we might be struggling
10. Keep paperwork and bureaucracy to the minimum
11. Online banking
12. Good customer service (the book “Our Toilets are not for Customers” by Floyd Coates was mentioned as a good book/reference on customer service)
13. Be able to communicate as close to the actual decision-maker as possible (preferably to the decision maker) in order to tell my story.
14. Be assured that the lender is ready, willing and able to lend for my type of need, and is interested in my business
15. Crystal clear expectations about the process, the players, the timeline, the criteria
16. A feeling that it is not the lender’s way or the highway, but rather you work with the borrower and customize to fit — I am a unique person with a unique business, with a unique financial need — let me tell you my story, show interest in it and consider it in the lending process. (Don’t throw me a bunch of paperwork to fill out and then tell me we will let you know)
17. Clearly and plainly ask me in terms that we both understand and then listen: How much do I need? How long do I need it? What is the best way to finance it? How do I plan to pay it back? If my plans fail, how will I pay it back?
18. Comfortable and experienced with that type loan I need?
19. Interested in my loan size and terms of loan (interest rate, collateral, guaranties, etc)
20. Willing and able to modify the demands to work with me if problems arise? Present alternatives?
21. The bottom line to me is this. Do I view them as a partner in my success or a threat to my existence? (When I deal with them, am I a victim or a victor?)
22. The lender will be there when I need them (not just in good times).
23. Honesty
24. Willing to be an advisor in business matters.
25. Willingness to understand my business.
26. Treat me like a real person and not just like another loan number.
27. Understanding that a loan is a two way street.
28. Need some leverage: up to 70% LTV.
29. Low and reasonable fees not exceeding 1% of loan amount.
30. Fast decisions and closings.
31. Relationship – May well be the most important in that I have to feel that I trust the lender has my best interests at heart while at the same time making a profit himself.
32. Competence – We certainly can’t be experts in all areas; however, I’d like to think my lender is “on top” of his subject matter when dealing with me. This includes coming up with creative solutions to some pretty complex lending needs that I may not otherwise know about.
33. Flexibility – Realizing the “times” we’re in there is still a right and a wrong way to handle things…i.e. year-end financial statements, special requests, etc. Feeling as though it is my partner & NOT ‘Big Brother’ I’m dealing with is very important to me. Often once the ink is dry the relationship mysteriously changes. At the same time, just like the rules for the lender change from time to time…dealing with a lender that understands changes may occur for the customer is also important. (i.e. Making a customer go late on a series of payments BEFORE being willing to discuss amending terms – that has never made sense to me if both parties act in good faith)
34. Clear credit guidelines – What I mean by this is that almost every banker will tell you they can complete a financing request during the initial meeting and after you have worked, sometimes for weeks, with the banker they will choose to not move forward for a reason that was clearly stated at the initial meeting. I am good with having to check with someone about moving forward, but to go through the amount of work necessary for a transaction and then be turned down before going to the credit officer or committee is frustrating and almost immoral.
35. Access to the information being provided to the credit officer or loan committee – There have been more than a few times where the information provided to the banker from the organization did not match the information presented at loan committee (or to the credit officer). I know I have lost transactions over inaccurate information prepared by a junior banker that did not ask questions or did not understand well enough to prepare an accurate picture of the financial position of the organization. Being provided access to the analysis could create a dialogue that would clear up discrepancies prior to loan committee. This would also help the organization prepare information in a more meaningful way to the banker to avoid future discrepancies.
36. Quick and concise decision to the credit request – In many cases there is a complicated process for approval with multiple approvals needed or even multiple committees. To know up front the necessary steps for approval and a timeline that is adhered to during the process is essential.
37. Finishing the loan process before being barraged by other services at the bank – It is always a frustration to spend time and effort looking at bank services before the transaction is approved and finalized. Once the transaction is final then it is appropriate to spend time with the treasury managers and private bankers.
38. Show an ongoing interest in how the business is progressing. Take the initiative to come to see me and how my business operates. Get out from behind the desk.
39. Offer business operating resources to help the success of my business in areas that are outside of what the bank offers.
40. Become part of my network… become an advocate and champion of my business.

My hope in publishing this list is that lenders will read and take action. It is my personal opinion that the customer actually pays the lender’s salary and helps make a job available for him/her. For without a satisfied customer there would be no job or financial institution. Maybe it’s time to listen to the tune business owners/borrowers are singing!

I believe your numbers are simply telling stories about the relationships, processes and knowledge running deeply through your business.  The production or publishing of your numbers should not be the end goal!  It is my goal in my business and this blog to emphasize the importance of the story of why your numbers are what they are. 

When your story is told through your numbers, the first criterion lenders require before they allow themselves be influenced by your story is, can they trust your numbers and you?  Lenders want to know, “Who are you and why are you here?” If you don’t take the time to tell a story about your numbers and answer these two questions, lenders will make up their own answers to these two questions, and usually it will be negative. It is human nature to expect that anyone out to influence others has something to gain. Most people subconsciously assume your gain will be their loss. You thus need to tell a story that demonstrates you are the kind of business owner that they can trust.

Lenders really don’t want more information. They are up to their eyeballs in information.  However, lenders want faith – faith in you, your goals, your success, your business and more importantly faith in the story you tell them. Recall, the greatest book in the world- The Bible – says it’s faith that moves mountains, not facts!

Faith needs a story to sustain it – a story that inspires belief in you and renews hope that your ideas and actions offer what you promise. Influence goes beyond getting people to do what you want them to do. It means they believe. Faith has proven to overcome any obstacle, achieve any goal. Money, power, authority, political advantage, and brute force have all, at one time or another, been overcome by faith.

Story is your path to creating faith. Telling a meaningful story based on your numbers means inspiring your lender(s) to reach the same conclusions you have reached and decide for themselves to believe what you say and then do what you want them to do. People value their own conclusions more highly than yours. They will only have faith in a story that has become real for them personally. Once lenders make your story their story, you have tapped into the powerful force of faith. Story is a pull strategy versus a push strategy.  If your story is good enough, lenders – of their own free will – come to the conclusion they can trust you and the message you bring.

Think about your own experience with anyone who has ever tried to influence you – coworker, salesperson, or consultant. Think of one person who succeeded and one who failed. How connected did you feel to each? Did you “feel connected” because this person influenced you or did they influence you because you felt connected? What made you trust one and not the other? Chances are that it was important for you to know what kind of person they were and what they stood to gain from your cooperation. Also, they most likely succeeded in influencing you by telling you a story that demonstrated who they were rather than telling you who they were, making themselves more believable. A story lets you demonstrate who you are.

It has been proven that more decisions are made by our emotions than our logic. Shouldn’t it then make sense to appeal to the lenders’ emotions (right brain) as well as their logic (left brain)? Just pure numbers appeal more to one’s left brain. The secrets of storytelling reside in the creative side of your brain, your right brain which is guided by emotions.

A roomful of lending executives locked in a room deciding your financial future is a dangerous place unless you know how to tell a good story. Clothing truth in story is a powerful way to get lenders to open the doors of both their minds and their vault to you.  When you want to influence a lender, there is no tool more important than story.  Story creates power and creates a mental imprint.  With story you can mold perceptions and touch the unconscious mind.  When you connect with the lender’s unconscious mind through story, you hold a leverage of influence over their current thoughts and perceptions.

What does this mean to you as a business owner?  First, make sure your numbers accurately reflect what happened in your business. Second, develop a story around your numbers that speaks to what has happened in your business and why and what is next for your business. Don’t let the numbers just speak for themselves!  Lenders will make up their own stories about your business from those numbers.

Let your story, along with your numbers, influence your lender.