Brian Tracy's Master Course For Business Success by Brian Tracy

Author:Brian Tracy
Language: eng
Format: epub
Publisher: G&D Media

Once you decide to go into business on your own, select your bank carefully. Interview several bank managers or senior lending officers in advance of opening an account. When you visit the banks, tell them that you’re going to be starting a new business and that you’re looking for a bank where you can open your accounts and keep your money. Ask them about their policies towards small businesses, their lending practices, and especially their lending authority. Every loan officer, bank executive, and every bank branch has a lending limit: the amount that they are allowed to approve as a loan without recourse to higher authority. Some junior lending officers have a lending limit as low as $10,000. It’s a good idea to ask each of the bankers what their lending limit is. They’ll usually tell you honestly if you ask them.

The most important thing in dealing with a banker is the chemistry between you and the banker. The quality of the interaction, the relationship between the two of you, is perhaps the most important single factor in your decision about which bank to use and which banker to deal with. You must feel very comfortable and friendly toward the banker, and the banker must feel the same way toward you, or you may be getting into more trouble than you’re looking for. Many businesses have been shut down by bankers who suddenly decided that they didn’t particularly like the business owner. Several lawsuits have been triggered by these seemingly arbitrary behaviors. Your job is to make sure that you get along well with the banker before you take out a loan and maintain the relationship afterwards.

When you have finished interviewing different banks, you make your selection and proceed to open your personal checking, savings, and company account. Then invite the banker you’ve selected out to lunch. During the lunch, tell them about your business plans. Have your completed business plan and your personal financial statements, showing your assets, your liabilities, net worth, and your next year’s budget projections to leave with him. Go over this material briefly and then let them look at it for a few days. Bankers have a process for evaluating a business plan. They have access to a good deal of confidential information on different types of businesses. After you leave, they’ll compare your financial projections with what they think would be reasonable to expect in that business or industry.

One of the best rules in dealing with the bank is to ask for money when you don’t need it. Once you’ve borrowed the money, repay it promptly. I once knew a successful entrepreneur who began borrowing and repaying money over a period of three years before he started his own business. He would purchase a certificate of deposit for $1,000 in a bank. Then he would go to the lending officer and pledge the certificate of deposit as collateral for a $1,000 loan. This is a very easy loan to get approved. He would then

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