|
|
Yes, your business can survive... and even thrive.
But in recent one-on-one interviews with senior loan officers we learned just how much stricter their lending criteria are. It's critical for you as a business owner to learn to play by some tough new rules.
|
|
Today's market uncertainties and new accountabilities are seriously affecting how and when bankers lend, even to businesses with which they have strong relationships.
If you're like many business owners, however, you may need a new loan or an increased credit line to run your company. And you have significant related concerns too:
-
How will I offset slow payers and defaults with a lower or maxed-out credit line?
-
When should I tighten credit for customers or cut them some slack?
-
What if the bank reduces my collateral-base value or, worse, calls my loan?
In addition, you might be struggling with other challenges, like pushing your sales force for new business without financing to support it, or trying to cut costs without hurting people or gutting your business for the future. And how can you keep your team optimistic and focused in uncertain times?
Such questions can be daunting, especially to business owners knee-deep in the day-to-day of a tough economy. But to remain viable a company must answer them to a banker's satisfaction. Positioning your company to meet the more rigorous operational and financial expectations bankers have is critical to getting the credit you need.
|
Bankers still want to make the right loans, but they have their own concerns:
-
Stricter lending standards are here to stay. How much will they stifle growth?
-
Will I have to call existing loans if they don't meet the new standards?
-
What credit risks can I take without running afoul of government regulation?
They also wonder about how much tighter the Fed will clamp down on lending practices as well as what's on the compliance horizon and how much it will cost.
So as they assess each lending opportunity, bankers now look far beyond the bottom line. Financials are still key, but your strong numbers alone won't unlock a loan or credit line, and neither will your historically good banking relationship.
|
|
Senior loan officers stress that they are looking for differentiators that separate your company from all the other companies vying for credit. Showing how your company stands out beyond financial performance can make or break your chances for valuable bank dollars. The key is to tell your company's story in a compelling and transparent way to the right banker.
Although you might pull everything together yourself, the reality is that you and your managers are naturally so focused internally that it's hard to see your business as objectively as an outsider can. As a result, clearly explaining your story to a skeptical banker is more challenging than ever.
|
|
|
|
For many of our clients, we serve as objective outsiders, and we see companies through a banker's eyes. We know how to identify and articulate a company's key differentiators and how to tell the story effectively, so that a banker can understand and value that company for what it really is.
We can make it easier for current lenders to continue to do business with companies by engaging in direct dialogue. Or we can help identify and negotiate new sources of financing that might be a better fit for specific business needs.
We also work to achieve real results by assessing alignment with the four critical areas banks are scrutinizing. (See the box above.) If needed, we provide hands-on support for managers to adjust operations or strategy.
|
|
Remember: Even though they are playing by tough new rules, the right banks do want to do business with the right companies.
But you have to know how to make the right matches. And, if you do, we're sure your company won't just survive the credit crunch but that it will thrive, and come out stronger on the other side.
|
|
Jim Stoynoff is a seasoned entrepreneur who has helped hundreds of growing companies to finance and improve their day-to-day operations. Before forming Synthesis Solutions, Jim was the founder and president of Damian Services Corporation, which provides commercial credit and process outsourcing services to hundreds of companies nationwide.
|
|
|
|
