Joseph Lampen, Advisor
Over the last several years as a commercial lender I’ve had the pleasure of helping many individuals obtain financing for their investments or businesses. I have heard many of the same things over and over to the point it’s a comedy when the words come out of a borrower’s mouth. There’s nothing inherently wrong with making these statements, its not like you’ll be denied if you catch yourself saying them. There are just some better ways to present yourself and your proposal when meeting with a banker. Here are some of my favorite comments and suggested alternative advice:
1. “These projections are really conservative.” Yep, I know. They always are because everyone is conservative. Is it because we live in West Michigan? The reality is, though, that you shouldn’t have to be ‘conservative’ or ‘liberal’, just rational. If you’ve done your homework, you should be able to project your revenues and expenses fairly accurately in a base case. From there you can prepare an upside surprise or a downside shock to evaluate the different effects certain events might have on the operational cash flow of your business. Read the rest of this entry »