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Your bank manager ‘wants to’ lend you money!

Your bank manager ‘wants to’ lend you money!

I promise you that is true! It is not out of some altruistic desire to help you or even a concern for the wider economy in general. But your bank does want to lend you money. The simple truth is that ‘lending money’ is what banks do. In very basic terms, they are in the business of taking money from a saver and lending it to a borrower, with the aim of creating a better return for the saver. So borrowers are essential to the business of banking!

So why is the news full of banks being unwilling to lend to small businesses or individuals?

The problem is that people misunderstand the banks. Once you realise ‘why’ and ‘how’ they operate, it is easier to work out ‘what’ they are looking for in a borrower. Their main interest, in many ways their only true responsibility, is to their shareholders. That means that they have a duty to give a good return to those whose money they have been asked to manage. They are simply a business, operating in a different marketplace to yours, with an obligation to make money. Just the same as your business…

Please don’t get me wrong. I am not defending the banks. I agree that they have performed pretty badly in recent years, and in some instances their practices have been beyond criminal. But what I am saying is that to get them to act in a way that helps you, you need to understand them better.

Perspective is a step closer to cure!

If you understand your bank manager and the pressure he is under, then it will much easier for you to persuade him to help manage your needs. Getting the other side’s perspective is a powerful ally to small business owners. By understanding that the bank ‘wants to’ lend you money, all you need to do is remove enough of the reasons why it shouldn’t.

So here are my top tips for presenting your case in a favourable light (from the bank manager’s perspective):

1) Stay loyal: In the same way that you desire loyalty from your customers, so your bank will value yours. If you have all of your financial dealings with one bank, they will be more favourable to helping you.

2) Don’t be a stranger: If your bank knows that that you are easily contactable, and won’t ignore calls, then they will trust you that little bit more. Give your bank manager your direct number!

3) Tell them everything: There is nothing that a bank hates more than nasty surprises. Experience will (should) tell you that everything will come out in the end. So just give them all the facts from day one… I promise they will appreciate it. It would also help if your financials were clear and straight forward. The most important thing to remember is to present a realistic business plan and (more importantly) repayment plan.

4) Make a commitment: Just as with your best clients, the longer you have been with one bank, the more they will trust and like you. So work on building that relationship.

If you remember that your bank’s prime objective is to ensure that any money they lend is returned (with added value), then you can make it easier for them to lend to you.

Paul

Your bank manager ‘wants to’ lend you money!

I promise you that is true! It is not out of some altruistic desire to help you or even a concern for the wider economy in general. But your bank does want to lend you money. The simple truth is that ‘lending money’ is what banks do. In very basic terms, they are in the business of taking money from a saver and lending it to a borrower, with the aim of creating a better return for the saver. So borrowers are essential to the business of banking!

So why is the news full of banks being unwilling to lend to small businesses or individuals?

The problem is that people misunderstand the banks. Once you realise ‘why’ and ‘how’ they operate, it is easier to work out ‘what’ they are looking for in a borrower. Their main interest, in many ways their only true responsibility, is to their shareholders. That means that they have a duty to give a good return to those whose money they have been asked to manage. They are simply a business, operating in a different marketplace to yours, with an obligation to make money. Just the same as your business…

Please don’t get me wrong. I am not defending the banks. I agree that they have performed pretty badly in recent years, and in some instances their practices have been beyond criminal. But what I am saying is that to get them to act in a way that helps you, you need to understand them better.

Perspective is a step closer to cure!

If you understand your bank manager and the pressure he is under, then it will much easier for you to persuade him to help manage your needs. Getting the other side’s perspective is a powerful ally to small business owners. By understanding that the bank ‘wants to’ lend you money, all you need to do is remove enough of the reasons why it shouldn’t.

So here are my top tips for presenting your case in a favourable light (from the bank manager’s perspective):

1) Stay loyal: In the same way that you desire loyalty from your customers, so your bank will value yours. If you have all of your financial dealings with one bank, they will be more favourable to helping you.

2) Don’t be a stranger: If your bank knows that that you are easily contactable, and won’t ignore calls, then they will trust you that little bit more. Give your bank manager your direct number!

3) Tell them everything: There is nothing that a bank hates more than nasty surprises. Experience will (should) tell you that everything will come out in the end. So just give them all the facts from day one… I promise they will appreciate it. It would also help if your financials were clear and straight forward. The most important thing to remember is to present a realistic business plan and (more importantly) repayment plan.

4) Make a commitment: Just as with your best clients, the longer you have been with one bank, the more they will trust and like you. So work on building that relationship.

If you remember that your bank’s prime objective is to ensure that any money they lend is returned (with added value), then you can make it easier for them to lend to you.

Paul Meades