Sure, your numbers tell a story. Business lenders are constantly improving their fluency in number-speak. Your financial statements and tax returns for 2007 and 2008…and 2009 year to date…are speaking up loud and clear.
But are they telling the story you want (and need) your lender to hear?
If your numbers were weak in the last several years, did you:
- make strategic decisions to temporarily sacrifice profits to keep the business as strong as possible?
- cut back on your personal compensation to take care of business?
- maintain staff, marketing or equipment replacement as competitors cut theirs?
- develop stronger connections with both your vendors and your customers to be sure you gave and received what was most needed?
- make a horizontal or vertical move to serve a related customer base?
- strategically retreat to your strongest, core business?
- remain active in the business community in a way that kept you front-of-mind with customers even when they could not afford to buy as much of your goods or services as they did pre-recession?
How will your lender know if you do not tell them? In many cases, the numbers will not!
Plan a meet with your lender very soon. Think through the not-so-obvious strategies you have put in place to rebound as quickly as possible. Also share the steps you took that did not work, and how you shifted on the fly.
If your numbers are looking good:
- What was the happy circumstance that allowed for the great performance?
- What are you doing to take advantage of your strength in terms of capturing market share or picking up outstanding employees?
- What is next for your business?
Your story alone will not convince a lender to say yes. But lenders everywhere are looking for good business loans to make. Heck, for a strong business it should be a borrower’s market!
Recessions are good ‘cover’ for poor performance. I train lenders in tax return and financial statement analysis. We are talking a lot in training about how to tell the businesses that are doing well… from the ones that did not but will recover…from the ones that just won’t make it. And we are talking about how conservative loan committees and regulators are as we move forward.
Your story, along with your numbers, is going to be more critical than ever. Be sure you give the lender the ammunition to make the loan, good numbers or bad!