Having two separate businesses, I know what it takes financially to launch and maintain a company. When you need a little extra $$$ to spark transition, you have to be prepared. NO BANK will lend any $$$ unless you can answer their basic number one question: “When will you pay me back?” “How” may be substituted or be asked simultaneously. The underlining theme is “What will be my return on investment?” Everyone wants some comfort that they will be repaid…and even make a little $$$ on the transaction.
The US Government is a BIG bank. I was floored when the automakers could not answer these basic questions. They talked about a forced-strategy…but not with conviction that they had a plan to back it up. Why do they need a month to prepare such a plan? Didn’t they prepare before going to the bank? Doesn’t instill a great amount of confidence.
When you want to use a newer technology, make sure you can explain how the investment will bring money back to the lender (aka business). Have a strategy and a high-level plan ready to hand and talk about with the business. Clearly define the “When” and “How” $$$ will be repaid. Include how the business will make money on the commitment. It builds trust and you’ll have a better chance at receiving the $$$ commitment.
Helping all size businesses find growth opportunities and demolish internal roadblocks to success.
Contact me to discuss how I can add real value to your bottom line. 
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November 29, 2008 at 2:44 am |
I am a banker. Your statement is correct–”No bank will lend any $$$ unless you can answer their basic number one question: “When will you pay me back?”. This question must be remembered to all loan officers in our bank when evaluate to loan applications. Many loan officers try to recommend to the branch managers certain loans are viable, marketing is good, collateral are enough, but the credit officers sometimes forget to ask the basis question: “When will you pay me back?”.