by Rick Duree
When I was on the hunt for my first million-dollar loan, I went to two different banks in search of a strategic partner to grow my business. I had relationships with both of them and appreciated how they worked with me through the loan process. They each knew my story but still asked for a lot of detail about changes in the industry and my particular business model.
I explained my cash flow to the banker step by step. It helped both of us understand the tilts and sways of my business. I was fairly detailed: “We’re going to buy this to help us make money this way. This is how we’re going to pay you back.” Don’t be shy here! When you’re talking with your banker, you need to be a good storyteller. You need to build a virtual image in his mind to help him internalize where you’ve come from, where you’re at and where you’re going. Once you’ve sold him on your plans, he’ll take your story, this vision you give him of your business, and try to sell his management on your loan.
Sometimes a bank will accept or deny loan applications based on internal lending practices, but many times it comes down to your presentation. Remember, it’s 10% what you say and 90% how you say it. The commercial bankers need to be able to sell you and your business to their higher-ups if you want to get any money. It reminds me of the theater: You have to play a part, and they have to come along with you in the story. Some people think business is all about numbers, but I tell you it’s not. Often it’s the vision you create that gets the loan done.
The bankers that gave me this first million-dollar loan strongly emphasized their desire to be relationship bankers. To go along with the main line of credit, the bank wanted to:
-Refinance my home loans.
-Open car loans.
-Handle my credit card processing.
-Open a corporate credit card for my store.
-Open several manager-level credit cards.
-Refinance my commercial property loans.
This bank had caught the vision of my vibrant ever-changing company and came aboard ready to sail. If you can sell your story to an engaged, energetic banker, then he can bring the heavy artillery in support as you fight through the trenches in business. I give a lot of praise to great bankers. Not so much to average ones.
Great bankers are invaluable in keeping your company liquid. Plus, they introduce you to countless bigwigs in hopes of growing your company and doing more business with you in the future. Great bankers have your company’s well-being at heart and earn their pay tenfold. They also happen to be regular suppliers of baseball game tickets. Gotta love ’em!
A self-made entrepreneur, Rick Duree launched four successful businesses and had four kids by the time he was 30. A professor of entrepreneurship, inspirational speaker and community builder, he founded the Duree Center for Entrepreneurship, where he actively mentors young creators ramping up their startups. He is also the author of “The Entrepreneur’s Bible: 52 Proverbs of Profit.”
Submitted 8 years 327 days ago