From Inside the Vault...

I had a very interesting week last week.  The predominant theme of the week was business owners asking me where to find financing.  Two clients were looking to change banks because the bank was changing the terms of their deal.  These banks were trying to decrease loans due to capital adequacy issues they had.  One business owner just didn't want to take time away from his company.  One was totally frustrated after talking to several banks only to hear "no", from each one.  They needed business banking advice.  Here are the five things to consider when looking for financing.

1.  Start with the bank where you currently have your business accounts.  Ask to speak to a business banker or someone who is experienced in dealing with business owners.  It is much easier to expand a relationship with bank (banker) that you have a relationship with versus making a change.  Exhaust that option before you move on.

2.  Before meeting with your current bank/banker, go to FDIC.gov and check out their financials to be sure they're not having any issues that would preclude them from lending to you.  If banks are having capital adequacy, liquidity or loan quality issues, they will be reflected in their financial statements.  If you have difficulty reading those financials, click on the "Ask a Banking Question" icon on my blog and I'll be happy to help.  Before you go thru the loan application process with any bank, make sure they're healthy.

3.  If you've decided to make a banking change, ask your CPA or attorney for an introduction.  The old adage "It's not what you know, it's who you know is still true.  Banking is still a relationship business and those introductions can go a long way to help.  LinkedIn can be a great resource for those introductions also.

4.  If you're interested in obtaining an SBA guaranteed loan from a bank, look for a bank that has the PLP designation.  The SBA designates certain lenders as participants in their Preferred Lender Program (PLP).  A PLP lender has the proxy of the SBA so they can give simultaneous approvals for the bank and the SBA which can be a time saver.  There is a list of PLP lenders on the SBA website.

5.  Have a comprehensive loan package that contains all the pertinent documents that the banks needs to properly underwrite the loan.  This package is the bank's first impression of how thorough you and how well you pay attention to detail.  You never get a second chance to make a first impression.  If you'd like to know what to include click on the "Commercial Loan Checklist" icon and I'll send you the checklist.

One client I was talking to last week, start singing the song, "Looking for love in all the wrong places..." summing up his experience in looking for banking in all the wrong places.  Use these five things to fast track your banking situation and maximize the chances of your banker saying "yes" to your loan request.