Newspaper article THE JOURNAL RECORD

Is Your Business Running out of Fuel?

Newspaper article THE JOURNAL RECORD

Is Your Business Running out of Fuel?

Article excerpt

When you find your business is behind on loan payments to your bank, don't automatically assume foreclosure.

Here are my suggestions to keep your company flying high: start by putting yourself in your banker's shoes. Regardless of the reason for your difficulty, if you saw your business from your banker's perspective, how would YOU react? Sit in judgment on yourself to see if you have provided your banker with all the right information.

Bankers are businesspeople just like you. If they believe you will succeed, they will work with you, but if they believe you will fail, they must cut their losses. After all, who wants to pump more fuel into an airplane that has lost its engines and is in the process of crashing? If you believe your company is still airworthy and your banker doesn't, then you have failed to do a good job of communicating. Also, realize that during rough times your banker's judgment may seem harsh, but it's not just because of you; rather it's been exacerbated because of your banker's past dealings with deceitful and dishonest business borrowers. How can you set yourself apart from these past business demons? FIRST, by providing your banker with frequent financial statements (at least quarterly) as well as a written general manager's report detailing your company's performance, projecting future results and explaining the causes of any downturns. You want your banker to believe you are doing the best possible job flying your business, but you must provide your banker with facts, not propaganda, hopes and pipe dreams. SECOND, when your business encounters turbulence, don't try to distance yourself from your financial partner. Keep your banker posted even during difficult times -- if you approach your banker needing an emergency cash infusion because of some significant negative occurrence you have kept secret, your banker will rightly wonder what other information you have deliberately withheld. …

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