Your Banker Hates a Desperate Face

Every one loves to be admired and every one loves to be considered smart. Research shows that we tend to overrate our abilities. The same is true for your banker. So next time you consider applying for a business loan try this strategy that appeals to your bankers sense of importance.

Step 1 – Prepare a good business plan. Ensure you clearly show the expected financing required, revenues, related expenditure and expected net income on a summary page. Prepare two scenarios, worst case and reasonably good. Have the two plans professionally prepared and bound. Hide the worst case plan and only show it if someone twists your arm.

Step 2 – Go to a credit union and ask to see the senior loans manager. Asking for a senior officer makes people take you seriously. You also want to get to someone senior who has some leeway in making decisions.

Step 3 – Tell the loans manager that you have been thinking about something for a long while and before you make final decisions you have decided to SEEK HIS ADVICE. Place the plan in front of him and let him browse through before you explain what the plan is all about. We all hate desperate people, look confident and thoughtful. Do not mention the word loan or look eager to discuss the financing part. Give a neutral facial expression and let him be the first to mention loan or financing.

Step 4 – When the loans manager mentions possible financing terms, it is time to do the opposite of how Regular Joe would react. Grab the plan and tell him that you need a week to think about it. Thank him very much, promise to get back to him and leave the office.

Step 5 – Go to your regular bank and explain to them that the credit union is ready to finance your plan but you are wondering if they could beat the credit union by offering a better deal.

Step 6 – Go back to the credit union loans manager as promised on the seventh day and tell him you bumped into your regular banker and he offered you a reasonably good deal. He will ask to see the bank deal so make sure you have something on paper.

Step 7 – Negotiate a good deal with the credit union manager. The issue is not whether you will get a loan or not, but how the deal is structured.

Try this strategy and let us know your feedback.