Author Archives: Charles Green

Lender Networking: Recognize Who You’re Talking To

By Charles H. Green

Most lenders are destined to be networkers, since it’s one of the paths of least resistance to find new business, even if the circuitous path sometimes resembles panhandling for leads. You can be more successful at this activity if you train yourself to be more observant of both how you impress others with your disposition, and the many people you will encounter out there in the crowd.

Much of the success of your effort is dependent on the other party’s interest and willingness Fraudsterto network, engage with you in conversation wherever it leads, and to find value in the whole process of building relationships.

For some people, the want to talk to people regularly is very natural, and a comfortable activity in any situation: in line at the elevator, at the gas pump, or even in crowded retail store. But even those people are not always highly confident, motivated networkers. Published statistics reflect that only one in ten people is actually comfortable in striking up a relationship with a complete stranger.

Unfortunately, this means that networking is going to be difficult with most people based on their own misgivings, fears and doubts. By understanding this fact and looking for signs early in your introduction to someone can help guide your degree of engagement. Your choice will either be to settle in and go for networking gold, or cut loose early when it’s apparent that your openness is discomforting to the other party.

In that vein, there are some distinctive attributes to watch out for that can be channel markers for your efforts, to either wave you on to someone else or let you know when to drop anchor and get to know someone better. Read More More

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Lenders, Shopping for a Mentor? Be Smart About It

By Charles H. Green

Lenders generally think of networking as a mutually beneficial meeting for both parties, but usually that’s not what it is. More often, it winds up with one person asking the other for a favor, or being given a benefit devoid of any reciprocal favor in return. That’s fine, and as I’ve recommended before, you should network with vigor, because as often as not, you’ll be on the receiving end of that exchange.

But sometimes, we need advice or assistance, and we stumble into an introduction to Two Way Streetsomeone reputed to have a lot of the answers we seek. Maybe it’s the president of an association, like the Chamber, or senior partner of a real estate company with a well-known reputation. We know that they know plenty that can help us navigate faster to where we want to go.

So, we get their card, follow up too quickly and actually score a meeting with this titan. We rush to set the appointment without pausing to consider exactly what it is we want to know, need to ask or plan to say, and exhibit a series of small insults, reflecting total disregard for the generosity of the other party and rudeness on our part. Meeting day arrives, we march into the big moment, and alas, we are disappointed that we walk away with exactly the investment we used to prepare for the meeting and what gifts we arrived bearing: nothing. Read More More

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Turn Borrower Objections into Borrower Advantages

By Charles H. Green

Have you ever been guilty of quitting early? During the pursuit of new business, I’ve observed many lenders, who, upon hearing the smallest peep of prospect objections,  turn and walk away from the potential loan deal with tail between legs. After all the work they spent to find the prospect, get the meeting, listen to the story, structure a financing solution, and pitch their idea, they throw it away after the client prospect says something less than OK!

Borrowers very often don’t have a great idea of what they want, much less what they need. Objections to AdvantageToo often, they fall for the quickest offer that kind of sounds like a solution, but when pressed, I’ve found that many sign on to financing deals just because someone wants to hand them fresh cash. It’s no wonder that otherwise smart, successful people wind up with mismatched financing that eventually hurts them more than helps them, after they encountered someone who understood selling loan deals more than crafting a financing solution.

Good lenders fight back by listening to the entire story of the borrower and offering a solution that really fits the situation to everyone’s mutual benefit. If you do your best and the prospect objects, it may be that they really don’t understand the competing terms or how your solution fits in their business. So, take the time to explain it in clearer terms.

What kind of objections are you likely to hear (and how can you respond)?

The equity (down payment) requirement is too high–All banks require borrowers to own some skin in the game, a measurement of personal contribution of the resources at risk to demonstrate the borrower’s commitment. Your investment lowers the risk of over-leverage and placing assets at risk if you cannot repay excessive debt.

The payments are too high–Payments are determined by the repayment term and borrowing cost. Our analysis demonstrates you can repay this loan at the revenue levels you have estimated.

The interest rate is too high–Interest rates reflect the bank’s cost of funds, a profit and the premium for the risk of credit loss. Most bank funds cost are very similar, so if someone is suggesting a lower rate, you should carefully examine all of the other terms offered to see what trade-offs are involved, like a smaller loan, extra collateral, or shorter repayment term.

Whatever their objection–Don’t just walk away. Make your case and leave the door open for them to think through your explanation, or for the competition to fall apart.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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Show Borrowers the Money

By Charles H. Green

Sometimes we, as either conservative or unimaginative lenders, forget that there’s another party in the negotiation for a business loan, who’s also thinking about what’s on the other side of closing. Our focus tends to drift to thinking about the annual volume goals we have, or start calculating a potential commission or bonus we’ll earn, when talk gets serious about doing a deal.

The best sales lender makes sure that the borrower focuses on what’s in their future, currency 1particularly the upside of getting expansion capital or the funding for a new building, because it’s their aspirations are what drives their decision to borrow.

During the interview process, you’ll learn a lot about the business, their financial condition, and the forecasts they have. Acquiring more capital is always for building capacity or providing capital to grow the business to do even better. It’s this growth that’s at the center of the borrower’s thinking, since larger premises, more employees, or more inventory are at the heart of their ability to get more clients, revenues and hence more profits.

So when you’re at the stage with the borrower to structure a financing transaction,  make a proposal, or ask them to sign a commitment letter, show them the money. If you’re speaking about the loan, speak in terms of a specific dollar amount, rather than just citing the “loan proceeds” or other ambiguous wording. Put it in terms of the actual dollar sum: “We’re prepared to lend you $1 million, eight hundred thousand, five hundred dollars to buy that new commercial building in which you can expand your business capacity, and help you move your annual sales to over five million dollars!”

In this way, you’re taking on their mission as your own, and enunciating the real sum required to make the transaction work. You’ll give emphasis to the work you’re doing on their behalf, and adding all the details, which lets them know that you’re tuned into their side of the deal.

Don’t be shy about throwing around a lot of dollars in your conversation–it’ll let them know you mean business when it comes to capital financing.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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If You Don’t Want the Answer, Don’t Ask the Question

By Charles H. Green

Commercial lending is usually a complicated affair with a gazillion moving parts that lenders need the understanding of to adequately quantify risks and assess the ability to repay. To gather that information from every client requires the acquisition and review of dozens of documents and the answers to many more dozens of questions. But unfortunately, too many lenders don’t stop there.

Sometimes an unfocused business developer gets off on a tangent talking about random Question Mark signsubjects that have nothing to do with what should be the only topic at hand: can this business qualify for financing? Sometimes, competing departments in your bank want you to start qualifying this customer for some other business than your business–their business.

I think commercial lending is too complicated of a proposition to qualify and sell, while simultaneously figuring out if my company might later sell them insurance, cash management or foreign exchange or other products that can wait for another day. And in my experience, 100% of my clients agreed.


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If your job is selling commercial loans, you need to focus 100% of your attention on qualifying that client for a commercial loan. You can sort out ancillary products and services for a broader ‘relationship’ tomorrow after loan closing. Don’t let the chump change of referral fees, spiffs, or ‘atta-boys’ thrown at you for doing someone else’s work slow down your drive to getting what you want–loan business.

When you prioritize those dozens of questions in the client interview, throw out any that don’t immediately pertain to the business at hand: can this prospect meet our credit criteria and does their operation have the ability to repay this obligation? Everything else will wait.

Your client will agree.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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Online Lender Dealstruck Now Delivers Loans Via Drones

By Alexander Petit

Online business lender Dealstruck, based in Carlsbad California, announced today its new, innovative way of sending capital to its borrowers. Drones. “It was the logical next step,” announced Ethan Senturia, Dealstruck’s CEO, “We have always been at the forefront of technological progress and wiring funds to our clients seemed so 2012. These drone deliveries further solidify our place as the market leader in tech innovation.

Loan Drone2

Dealstruck Loan Drone

The new delivery project has been in testing for weeks and has had much success according to the borrowers. “Dealstruck’s Loan Drone is the best,” remarked Carol Rogers, a client who used the service last week, “After my deal was funded, I logged on, popped in my address and a bag of cash arrived at my business in half an hour! I didn’t even have to go to the bank. Thanks, Dealstruck!”

Despite the initial successes of the new funds transfer method, the road to launch was plagued with hurdles. “Did we lose a few drones here and there during the testing phase? Sure that’s bound to happen. But we’ve perfected the guidance and stabilization systems so we’re good to go” remarked Ryan Campbell, Dealstruck’s VP of Sales.

The aim of the program is to make Dealstruck’s cutting edge lending options even more competitive in the quickly growing financial tech marketplace. “Our new Loan Drones are just one more way we beat the other lenders out there. The only thing lower than our drone’s altitude is our interest rates,” quipped CEO, Ethan Senturia.

Dealstruck’s CTO, Russell McLoughlin, and Lead Software Engineer, Adam Grant programmed the Loan Drones to complete their deliveries in a safe and efficient manner. “Though ACH transfers and wiring funds are secure methods, we felt that this delivery method will really set us apart. The biggest hurdles we currently face with our Loan Drones seem to be large birds becoming emotionally attached to the devices, and kids with slingshots. Those small issues aside, the program is in full swing, as our drones can deliver much needed, affordable capital to any of our clients, as long as their business isn’t surrounded by lots of power lines or the occasional kite flying festival,” said Grant.

When asked what other innovations Dealstruck was considering employing in the future of small business finance, the answer was simple. “We aim to be more eco-friendly too, that’s extremely important to us. Our next initiative is to power our servers with very green hamster wheel generated electricity.”

Dealstruck would also like to point out that if anyone has the remains of a downed drone with the company’s logo somewhere in the vicinity of Lincoln, Nebraska, they should return it promptly to Dealstruck, Inc.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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This article was published on April 1st, 2016, otherwise known as April Fool’s Day! Dealstruck is not really using drones to deliver money, although the part about them being a leader in the small business lending market is no joke! Find out more about Dealstruck at www.dealstruck.com or speak to one of our representatives now at 1-855-610-LOAN. The hamster wheel electricity is still in Beta testing.
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Lenders, You Might Be Bad at Networking, If…

By Charles H. Green

I’ve used this forum to encourage you to get out there, and get out there often to meet people, make connections and become important to someone else. Why? Because people do business with people they know, and a large number of prospective borrowing clients are referred to lenders, rather than just being found or recruited.

Networking is all about building a social network of people who get to know and trust you, Blinded by Moneyand when the opportunity arises, helps someone else solve a problem with a phone call to you. So it’s important and rewarding for you to methodically build that base over the course of years.

But many of you aren’t good at it, not so much because of your shyness or any lack of social graces, but rather you just don’t recognize what success means in networking. You’re looking for instant karma or the ‘peel & win’ Lotto card, and that’s rarely–very rarely–going to happen.

So here’s a few other metrics that the use of indicates you’re missing the point on being a good networker. Read them all and ask yourself, do any of these describe you?

Measure success by the number of business cards you collect? Wrong approach–it’s not how many folks you shake hands with, it’s initiating a genuine connection that leads to familiarity and trust that matters when counting noses among your network. Whoever winds up with the largest number of cards at the end of the event probably hasn’t gotten much out of meeting most of them.

Look over the shoulder of the person you’re talking to in case someone more interesting shows up? You should be focused on getting to know whoever you’ve met and get to know whether they are a worthy connection, rather than trying to stalk anyone you think might be a better find.

Try to look smarter and more competent than others so people will be drawn to you? Your smartness and value as a connection will be self apparent to anyone really engaged in the introduction to you, unless they too are poor at networking.

Assume anyone standing alone is a loser and should be avoided? Some of the most valued connections I ever made were met with me starting a conversation to someone standing alone–they appreciated my initiative and I felt that I won a prize by speaking with someone ignored for the wrong reasons.

Demonstrate your power and influence by talking in a loud voice? Try this approach and it won’t be long before you’re the one standing alone.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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What’s Your Priority? Funding Loans, or Funding Good Loans

By Charles H. Green

When you’re hired to develop new business loans, the presumption on the part of your employer is that you’ll find ‘good’ loans. It’s not a stretch to visualize their desire for you to walk in each week to introduce a new client that’s prescreened and reasonably qualified for the suggested loan, free of all the warts, wounds and worries that can instantly kill their interest in the deal.

The nature of business loan development has changed greatly over the years, from when Onehighly trained loan officers (called that because they could actually make a credit decision) identified clients, analyzed their information and made a lending recommendation. Those recommendatios carried more weight then, based on the loan officer’s experience and reputation–and obvious priority to protect the bank from credit losses.

In some places today, it’s not hard to spot the transformed ‘business development officer’ whose sole job–and often training–is limited to just digging up leads. In some of these cases, the results are just as shallow. What happens? An endless stream of half-baked deals that aren’t adequately screened and quickly dismissed after a waste of everyone’s time and a lot of copy paper.

To be successful at developing loan business today–measured by the number of proposed loans that actually get funded–it’s necessary to originate good loans. These aren’t just deals that you can expend a fair amount of begging or cajoling your way into getting a reluctant approval, but rather loans that you determine fully meet the criteria laid out in your credit policy, and represent the ‘credit box’ your company is targeting.

How to find them faster?

Number 1–make sure you know the difference; Bone up on the characteristics required in the credit policy and start studying the information you gather to determine if the evidence suggests it’s really qualified.

Number 2–stop wasting time on deals that don’t appear to be heading to number 1.

If you can’t do it, trust me that your bank can find someone who can.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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Calling or Closing–What Funds a Loan?

By Charles H. Green

I’ve shared a lot of insight in this column with the front line over the past year about many subtle but effective tactics BDOs can use to make the best use of their time and energy to find new business. Today they get a break and I’m going to aim a suggestion at all those who supervise, direct and motivate (or not) those business developers: lending sales managers: think smarter.

Many folks rise to management because they prove themselves at accomplishing the very Telephone callsjob they’re supposed to supervise, but no one evaluated how good of a manager they might be. Does that make sense?

Let me quickly add that many, if not most, do a great job. But based on some folks I’ve reported to over the years, some don’t. To generalize, many know what made them successful and have decided that’s it’s the cure-all to be prescribed to all others under their watch, whether that works or not. The worst example of this kind of thinking is the idea of required weekly ‘cold calls,’ the count of which are monitored and used as a metric of meeting expectations.

Mind you, I’m a believer in cold calls for some, but like every other tactic, you have to be comfortable doing it to be effective, and many folks aren’t. I’ve been in shops where the blessed ‘cold call’ count was an expected duty week in and week out. In that kind of environment, where a directive is coming from on high instead of an inspiration from within, this tactic loses much of its impact.

What’s really important to determine how well a BDO is meeting their expectations is how much business reaches the closing table.

And I’ll quickly follow that opinion to highlight the folly of hiring someone on a six month watch, the ‘produce or move on mentality.’ It’s a waste of time and in most banks I’ve worked for, didn’t provide sufficient time for the bank to even make a credit decision and organize a closing. But that’s another topic for another day.

Meanwhile, back off that outlook that ‘everybody needs to make 20 cold calls each week,’ and watch the loan closing numbers rise, as more attention is spent on what’s really important and more impactful–get the right deal to funding.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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Ask and You Will Be Answered

By Charles H. Green

So you know your job pretty well, right? You can walk into a crime scene and sort out the narrative quickly with just a couple of questions, because after all, if you’ve seen it once, you’ve seen it a thousand times. The problem with that theory is that no two crimes–or commercial loans–are exactly the same.

Some commercial lenders don’t spend enough time asking questions because experience Ask Questionsand expediency lulls them into the presumption that they know the answers just by glancing. Problem is, by skipping over one of the prime sources of information–the prospective borrower–they tend to sometimes miss critical details that could help them get the deal approved easier, or kill it altogether.

Consumer loans rely on three pieces of data: credit score, income, and debt-to-income ratio. That’s all. Commercial loans require many layers of information, all with good cause. You have to know the clear identity of the business owner(s), personally and corporately, the business plan, financial results and projected results, legal standing, geographic considerations, cost to produce and cost of provide, staff information, market, industry….etc.

Obviously in that list, and the many subtopics each item may have, are plenty of places for minutia to reside that may be pivotal to your deal. Maybe, that is if you’ll just ask for it.

Client interviews may be monotonous at times (thinking about your doctor’s checklist: aches, pains, joints, dizziness, shortness of breathe…etc.) but necessary to ferret out a clear picture of the strengths and weaknesses of your prospect. So ask questions of your prospect as if you are getting an advanced degree in them. Don’t stop at what you think the vital information is, because in the end, it all may be vital.

Getting to know more definitive information about your prospect up front will prepare you to make better decision in the preparation of an application, and doing so will win you more loan closings.

And besides, it’s your job.

SBFI offers 40+ training courses to improve commercial lending skills-get catalog here.

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