Masonry Magazine April 1992 Page. 37
TEN GOLDEN RULES
Continued from Page 17
If the borrower misses a payment and doesn't provide an explanation (and starts ignoring phone calls), the banker's antenna goes up. He immediately becomes concerned about the financial affairs of the borrower.
Golden Rule 7: Make Your Loan Payments On Time
Human nature being what it is, some people make their payments either early or on time. And, once again because of human nature, some people always seem to run late. All bankers get a list of their past due loans. Just as you'd expect, a banker keeps a very close watch on his "past due list of accounts." If you're going to run a few days late, it's wise to make a quick telephone call to the bank. All you have to do is tell your loan officer when he can expect to receive your payment. Thus, a quick phone call really can go a long way in helping to create a positive relationship.
Golden Rule 8: Never Spend the Money Before You Receive It
Many times a banker doesn't have the authority to approve a loan request. This is because the dollar amount of the borrowing request is above the banker's lending limit authority. When this happens the loan proposal must be approved by a senior banker with more lending authority or by the loan committee.
More than once a lending officer has said, "The loan looks good to me." However, he has to eat his words when his customer's request is turned down by the loan committee. While the banker may have a red face, the customer is the one with the problem. Don't take your banker's offhand comment as a firm commitment. Make commitments to spend the money after everything is signed and you have funds in hand.
Golden Rule 9: Discuss Important Matters in Person Rather Than Over the Phone
Whenever you want to negotiate details of a term loan agreement, ask for a lower rate, or discuss some other important point, do so in person rather than over the telephone.
Not only will you be able to read the banker's "body language," but you will have more time to explain your viewpoint and make your case.
Golden Rule 10: If You Have a Good Banker, Send Him or Her References
Because of deregulation, banking has become a highly competitive industry. The increased competition is forcing all banks to serve the needs of their customer better, however many bankers are still quick to quote their bank's policies and guidelines. Competent professionals are worth their weight in gold. If you have a good banker, refer your friends and business associates. He or she will appreciate your efforts, and so will your colleagues.
How you handle yourself and the information you present the banker will affect whether or not you get your loan. It will also affect the interest rate you'll be charged. Following these suggestions will help you develop a favorable relationship with your banker and assist you in obtaining the money you need for your projects.
ROGER BEL AIR is a national lecturer, consultant and author of the popular book "How to Borrow Money from a Banker." He resides in Seattle. To receive the free publication "Questions Bankers Ask," send a self addressed, stamped envelope to Roger Bel Air and Associates, Postoffice Box 20794, Seattle, WA 96102.