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When it is harder to find a good loan to make….

These are tougher times to make loans. I know, all over town I keep seeing signs in bank windows…’We have money to lend’. What lenders tell me, though, is that even though there may be money to lend at their bank or credit union, they are having to work harder to get loans approved.

Nick Miller, President of Clarity Advantage in his article, Selling in Tough Times…Preparing for Good,  focused on communicating with the small and mid-sized business borrower, customer or prospect…clearly and often.

Those of you who have been in my training workshops on Tax Return or Financial Statement Analysis will recognize some of the points I consistently make about using the credit process as a great opportunity to understand the borrower’s business better.

Key points (Bullet points are Nick’s and numbered points are mine):

  • Know who you can and want to sell to
  1. Has lending management clarified which businesses are in the new ‘sweet spot’?
  2. Do you clearly understand the loan opportunities and restrictions, but also the other products and services to pitch?
  • Fine tune your value proposition
  1. When other bankers are after your best customers, and for that matter, you are after theirs, what sets you apart?
  2. In this case, the ‘you’ can be your bank or the ‘you’ can be you personally.
  3. If you have developed a relationship beyond just saying yes/no to loans, that comes in here.
  4. What are you doing to bring more value to them in terms of brainstorming improved cash position, advising on whether to put off expansion or equipment purchase, etc.
  • Stick to your disciplines
  1. This is very hard, especially if you are not seeing the results you are used to.
  2. Get clear on the plan and then stick to it. If you are tempted to stray, go through a process to determine if that adjustment makes sense with your overall goals and run it by other lenders in your company to see what they think.
  • Increase your coverage
  1. It makes sense that if you are getting fewer ‘conversions’ you need to touch more prospects.
  2. The added benefit of increasing your coverage is that you’ll gain more knowledge of the market place and tactics that are working in this environment to bring back as a resource to all of your customers.

This was a great article and this blog post just touches the surface. I especially like the understanding of business operations that he covers on the second page.

Read the full article.

About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at, she speaks at banking associations on risk management, lending and director finance topics.