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4 Things I Wish ALL Borrowers Knew

Last week I had a business coffee with Jonathan Williams, Vice President at First Citizens National Bank (LinkedIn Profile) in Brentwood. During our meeting, I told him that most people don’t speak “banker,” and that it could be very scary.  He told me there were four things that borrowers could do to make the process easier:

First, have your financials organized and ready to give me.  The typical list I need to collect from each borrower:

  1. 3 years of personal and business tax returns with all K-1s
  2. a YTD income statement and balance sheet
  3. an accurate personal financial statement that is signed
  4. a debt schedule for your business.

The list seems long, but there is a reason we need each of these items.  It gives me an accurate picture of your financial life and helps me to prove you can repay the debt.  When you don’t want to provide these or overstate your assets you make my job much more difficult and cause me to investigate more because it looks like you are trying to hide something.

Second, It is important to know your financials, particularly if there are anomalies in them.  When your sales are up one year and down the next, I need to know why.  If you can explain your income cycles to me without having to research my questions it gives me confidence in your ability to run your business.  You look like an expert and make me want to do business with you.

Third, don’t try to put too much lipstick on a pig.  If you have difficult data in your financial performance, please don’t hide it from me.  Acknowledge it and tell me what you did to prevent it from happening again.  It gives you credibility and makes me want to trust you.  If I believe you have misled me, it could kill the deal before it has a chance to happen.

Forth, please develop a relationship with me.  Bankers don’t just want a transaction.  We want relationships because it allows us to grow with you and develop trust.  This should be a two-way street where both you and I can make a little money and we get the chance to grow with each other.  When you make it a transaction only relationship that is all about the rate we can’t grow together. When you really need me, I might not be able to deliver for you like I can on true relationships where I have developed with my customers.

I want to thank Jonathan for being part of C|SUITE and taking great care of his clients.