Masonry Magazine April 1992 Page. 17
president-Canada, vice president and general manager of Strong Equipment. Woodbridge, Ontario.
St. Louis Scholarship
A CONTRIBUTION of $4,000 was presented to the St. Louis chapter of the American Institute of Architects scholarship fund by the Masonry Institute of St. Louis and the Bricklayer's Local # 1 of Missouri, recently. A masonry scholar will be designated for this award.
The AIA scholarship fund was established to help architectural students in need of financial assistance continue their education.
Ten Golden Rules in Dealing With Bankers
Following a few simple guidelines will enhance your relationship with your banker and improve your chances of getting the money you need for your next project.
BANKERS LIVE by the golden rule. Maybe you've heard it before: "Those who have the gold make the rules." There's another expression which you're probably familiar with: "It takes money to make money." These expressions are probably more true in today's fast moving world of construction than ever.
It's no surprise that most business owners need to borrow money from a commercial bank. What may be a surprise is that few people ever feel comfortable in dealing with a banker. The would-be borrower's effectiveness in the financial community is impaired because he doesn't understand the world of banking and the perspective of a banker.
However, following a few simple guidelines will enhance your relationship with your banker and improve your chances of getting the money you desire for your next project. These guidelines, referred to as the ten golden rules, are as follows:
Golden Rule 1: Tell Both the Good and the Bad
There is an expression in the banking industry which says, "Would-be borrowers are always optimists." When making a loan request it's easy to over emphasize all the positive aspects of the loan request and omit everything else. Remember though, the best relationship is built on credibility. Be sure you present all the pertinent facts.
Golden Rule 2: If You Don't Understand What Your Banker Is Saying, Ask Questions
Most people have a tendency to talk the jargon of their industry. Bankers are no exception. Since few people have a strong financial background, a communication gap can be created as wide as the Grand Canyon. If a banker starts using fancy words or terms you don't understand, ask for clarification.
By ROGER BEL AIR
Roger Bel Air and Associates
Golden Rule 3: Always Mention A Secondary Repayment Source
Bankers are trained to focus on how the bank would be repaid if the primary means of repayment goes sour. Beat your banker to the punch: when making a loan request always mention a primary and alternative means of repayment. This demonstrates that you have done your homework.
For example, "I'd like to borrow $20,000 for the purchase of a new car," says Candy Kovner to her banker. "I'm also willing to pledge the car as collateral," she adds. "That way, if something unforeseen happens you'll have a solid secondary means of repayment."
Golden Rule 4: Anticipate A Banker's Questions and Have Appropriate Answers Prepared
If a banker feels comfortable with your management abilities and your project, there's a good chance that you'll get the money that you need. Of course, how you handle yourself and the information you present to a lending officer is important. Always remember that bankers are trained to ask specific questions and then look for "right" and "wrong" answers. There are several excellent books on this topic at your local library.
Golden Rule 5: Never Bluff. If You Don't Know an Answer to a Question, Admit It
Sometimes a banker asks a question about a person's financial affairs and the would-be borrower doesn't have the answer. If this happens to you, admit that you don't know. Never fudge. You can simply promise to find out and telephone with the information.
Guessing is risky; if you are wrong a banker may question your credibility on other points.
Golden Rule 6: Never Surprise Your Banker With Bad News
Bankers don't like to be surprised. They want to fully understand the borrowers' situation. That way they feel they are working with borrowers, rather than just trying to protect the depositors' deposits.
It's easy to keep bankers informed when everything is going well. However, open communications often stop as soon as the borrower starts having financial difficulty. The borrower hopes that the situation will improve; he reasons that by not mentioning anything now, he will avoid an unpleasant confrontation.
What does the borrower risk with this approach? His credibility. When Continued on Page 37