Many business people seek coaching on how to approach lenders, sometimes from brokers, consultants, or accountants. These professionals can all assist in different ways. However, there’s one thing you can do for yourself as a business owner that’s perhaps the most important step in approaching a source of financing. It’s simple, and it’s free: tell your lender your whole, complete, and straight-up story.
Skilled In Finance
Think of your lenders or sources of financing as specialists in what they do. Much like your doctor is highly skilled in telling when you’re less than straightforward about what you do or don’t do to maintain your health, your lenders are similarly skilled in the financial sense.
Lending professionals can tell when they’re being given an incomplete story. They get frustrated when they have to drag the real story out of an applicant. When forced to go through that process, they’re moving at a relentless pace in their minds towards saying “no”, which doesn’t help anybody involved, most particularly you, the applicant.
How Clients Frustrate Lenders:
- Not providing complete financial information (in some cases clients or their representatives will claim the information “isn’t available” or is “too sensitive to share without a term sheet from the lender”. As it’s impossible for a lender to review a transaction without complete information, such statements put the application on the fast track to nowhere;
- Not providing a rationale for transactions such as incorporating new companies and transferring operations over to them, nor providing legal documentation showing that it was all done on the up and up with the consent of existing lenders or other partners as required;
- Passing the buck to other people involved with your business, with statements such as “I don’t understand my key contracts with my customers, but my accountant or general manager does.”
Tell your lender your whole story. Just like with your doctor, if they know all the problems, they might be able to help. If they can’t grasp your real situation, they simply won’t help. Lenders see it all – tax problems, partner problems, customer problems, cash flow problems, and more. They’ll be less surprised by your problem then you think. Just like your doctor, they want to help – seeing a client succeed brightens their day.
I genuinely hope this advice helps you in your next pursuit of financing!
Accord Small Business Finance provides working capital loans under the product banner AccordAccess. Accord Small Business Finance is a wholly-owned subsidiary of Accord Financial Corp.. Accord Financial Corp. is publicly listed on the TSX under the symbol ACD, and has been a leading provider of asset-based lending and working capital financing solutions for Canadian businesses for nearly 40 years.
Article appeared on the Business Examiner Peace Cariboo Skeena – July/August 2017 Issue
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